Transition financing in agriculture: Baltic country case study

The sector of agriculture is one of the most crucial in the context of ensuring food security as well as in the care for sustainable development. The food security can be improved through several aspects, one of them being the agriculture system transition, implementing more and more regenerative measures. From the agriculture transition, due to the efforts needed to achieve the expected level of green transition, farmers themselves are expected to benefit less than the future society and nature in a whole. Yet both financial institutions and agriculture companies have not reached a common understanding, what requirements should be in place to establish mutually beneficial financial products to achieve the expected level of transition in a timely manner. The aim of this study is to evaluate funding options for agriculture transition in Baltic countries – Latvia, Lithuania, and Estonia. In total, for screening purposes, 29 different Banks operating in the Baltics were identified. The analysis of the financial product purposes provides a high-level perception, that loans, even if not indicating signs of support for green transition, may still support the improvements of overall country and society sustainability. The expert judgement was used to find potential links with the United Nations Sustainable Development Goals (UN SDGs) identifying the potential SDGs that could be tackled when providing the financing to the specific purpose. Only two banks are observed to provide financial products that can be assessed as focused on green transition, and this research shows that financial products for agriculture companies willing to transition to sustainability are not broadly available.