Financing the transition to farming from your savings

KEYS TO THE RIGHT TAX EXEMPTION 5/8 – Land companies raise money to support farmers who adopt more environmentally friendly practices. Citizens are encouraged to do so by reducing taxes.

From 56% in 1982, the share of French territory dedicated to agricultural land fell to 51.8% in 2020, according to INSEE. At the same time, the so-called “artificial” lands continue to expand, mainly as a result of the growth of individual housing and the road network. With the support of the state, which provides tax increases, taxpayers have the power to reduce this consumption of space through buildings and asphalt, while contributing to the installation of farmers who respect the principles of agroecology.

Civil savings

For this, there are several land companies that were created to collect citizens’ savings and finance the purchase of agricultural land for the settlement of farmers. The pioneer, Foncière Terre de Liens, active since 2006, has almost 20,000 shareholders, including more than 1,600 new ones in 2022. “The real estate company has a double objective: by buying, it contributes to the protection of agricultural land by renting it. to farmers who will use them in organic, nutritious and humane agriculture, explains Marie Mognardová, responsible for the solidarity holding of shares in Terre de Liens. It also has the dimension of mobilizing citizens from whom it raises money to increase its capital to acquire and maintain farms. » In 2022, the real estate company collected 18.6 million euros from citizens, acquired 35 new farms and strengthened another 20 through additional land acquisitions. Transactions that enabled the installation of 59 organic farmers and the maintenance of 21.

Generational renewal

In fact, these entities are supposed to support the renewal of generations of farmers. “The generational theme is crucial, as half of the farms are run by farmers aged 55 and over who are close to or already at retirement age,” notes Vincent Kraus, co-founder of Fermes en vie (Feve). To accelerate the agro-ecological transition, we need to reach out to project leaders who will replace current farmers outside the family context, knowing that access to land is one of the main barriers to installation. » Fermes en vie property, which has been operating for just over two years, has enabled 19 farmers to settle on 11 farms. By the end of this year, five projects should be financed, roughly thirty with a goal of 2024. “We make the land available as a lease with a right of first refusal,” explains Vincent Kraus. The aim is to enable farmers to settle without land-related debt while giving them the option to buy in the long term as they aspire to eventually become owners. » Vincent Kraus sees this as an opportunity to turn around the real estate company’s capital. “It’s a way to recoup funds to finance other projects later,” he explains. An approach that differs from that of Terre de liens. “The real estate company is not intended for the resale of farms, which is a guarantee of the preservation of agricultural land,” emphasizes Marie Mognardová.

No dividends paid

The two real estate companies provide subscribers with a tax rebate of 25% on the amounts invested, subject to certain limits, notably limiting tax gaps to €10,000 per year. The current offering of Foncière Terre de Liens securities is open until March 31, 2024 at the latest with a minimum subscription of one share at a unit price of €105 (plus €3 in fees for the first 166 subscribed shares). If the number of shares requested is not limited, a tax discount is provided up to the first 100, so that the tax benefit can be claimed by all subscribers. For the real estate company Fermes en vie, the minimum subscription amount is set at €500 (plus 3% subscription fees). None serve as dividends, and the unitholder must agree to hold them for seven years, when they can request a redemption. If he can hope for share price appreciation during the life of his investment, this should not be his primary motivation for investing, believes Marie Mognardová. “The bottom line is that your money is useful and you’re not wasting it. »

Leave a Comment