Farm debt capital declined from €42.0 billion in 2010 to €38.6 billion in 2022, a decrease of 8 percent. Meanwhile, equity rose to €66.4 billion, almost three times as much as in 2010. Greenhouse horticulture saw the sharpest decline in loan capital among all agricultural industries. This is according to an analysis from CBS. 
Loan capital consists of the total of short-term and long-term debt. Having too much debt on the balance sheet can create financial and economic risks.
Within agriculture, equity increases mainly due to the increase in the value of land. An exception is greenhouse horticulture, because of its limited land area.
Biggest fall in loan capital in greenhouse horticulture
With a 56 percent decline, greenhouse horticulture experienced the largest decrease in loan capital of all business types. In 2010 borrowed capital amounted to EUR 8.1 billion, twelve years later it had fallen to EUR 3.6 billion. Before 2010, an increase actually took place. This was partly due to economies of scale and the 2008 economic crisis that led to falling consumer demand. As a result, greenhouse growers applied for additional financing. After this period, loan capital declined again and the debt-equity ratio changed. Favorable operating results in recent years have been used to reduce loan capital.
The debt capital of open-land horticulture companies had decreased by 3 percent in 2022 compared to 2010.
Horticulture companies lead in debt capital decline
The debt capital of horticultural companies fell from 10.7 billion to 6.1 billion euros between 2010 and 2022. A drop of 43 percent. At the same time, equity increased from €3.2 billion to €7.4 billion.
Horticulture consists of greenhouse horticulture and horticulture open ground. Greenhouse farms account for 65 percent of total revenues in horticulture.
Only increase in loan capital at arable farms
Arable farms are the only agricultural sector where loan capital increased significantly. By 2022, compared to 2010, it had increased by 38 percent to €7.5 billion.
Horticultural farms and livestock farms showed the biggest absolute decline in loan capital. The loan capital of loft animal farms decreased by 28 percent.
In 2022, livestock farms had the largest share of loan capital of the balance sheet total at 52 percent. Arable farming had the smallest share at 28 percent.
Source: CBS