Mr. Seán O'Leary:

The questions posed by Deputies Cahill and McConalogue are similar in terms of our proposals to deal with the cashflow crisis on dairy farms, in particular. Since last March, it has been within the remit of our own department to make an exceptional exemption regarding state aid. It was announced from Brussels that up to €15,000 of state aid per dairy farmer could be made available for a period of three years; there was a three year exemption on that. At that stage, we put forward proposals by which we felt the Department could make low cost loans available to farmers. Members may recall there were a number of issues at the time, including the overhang superlevy payment and the merchant credit building up on farms. Those options have been available since last March. In discussions with the Department on the previous superlevy scheme, that money was sourced at 1% and made available to farmers. In light of the current crisis, which has continued over the past year, there is a responsibility to deal with that issue through that state aid exemption. The Commissioner, while refusing to move on the postponement of the superlevy repayment, said it was open to each member state to incorporate that into that state aid exemption. That opportunity still exists. The Minister and the Department officials have said they are looking at it. The message we have been sending out is that as those merchant credit bills fall due for repayment and as taxation bills start to hit this autumn, the time for that cashflow relief is now. That is one specific proposal.

Regarding the question on how the €11.1 million should be disbursed, that funding has to be matched, as the previous scheme last September was announced and matched. As dairy farmers, we would like to see now, as then, that money paid out directly to dairy farmers but, unfortunately, in this particular case, there are a number of obstacles to that. First, it is not allowed to do that specifically for dairy farmers. This aid is open to all livestock farmers and we must take cognisance of that.

The other issue is that it is a conditional scheme and must meet a number of criteria in order to qualify. In examining the scheme, we assessed how the money could best be made available across all sectors and used to best effect, rather than having a piecemeal amount of money spread over a number of schemes. The Department has indicated a willingness to look at how this money could be used to make cashflow loans available to farmers. We have endorsed that idea. Unfortunately, at this stage no meat has been put on the bones in terms of how the Department proposes to proceed. We will certainly be meeting its representatives in the coming weeks. A decision on how the money is to be used must be made by mid-November.

The overriding issue on farms is how farmers will be able to extricate themselves from a situation that has arisen, through no fault of their own, in the midst of an expansion programme and major volatility caused, by and large, by political decisions. Dealing with that particular issue will be the number one priority.

On the question of a cap or otherwise on whatever might arise, the latest information we have from ICOS is that, by and large, one is currently looking at merchant credit bills in the region of €30,000. We are dealing with that issue in the midst of an expansion programme. We have finally seen a halt to the downturn with milk prices starting to rise. However, we have to deal with the overhanging debt on dairy farmers, particularly younger expanding farmers. We cannot walk away from it. There is an issue of cost to finance and the availability of finance. It comes back to the question of one's ability to repay.

We have seen the Glanbia MilkFlex product come onto the market and the security is based on a commitment on repayment from milk cheques and milk accounts. Our own pillar banks will have to stand up and meet some of that demand and match what is out there.

The problem, however, is that we have a lack of competition, as identified by the president. When that State aid and relief is available we have to take advantage of it. We cannot walk away from our responsibilities in that regard. The Minister has to make announcements on this in the coming weeks. The discussion process has been going on for six months or more.