Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

I thank the representatives of the three banks for their presentations. The representatives of Bank of Ireland have said 1,900 applicants were successful, whereas the representatives of AIB did not give a figure, but Ms Finnegan said the bank had catered for everyone up to 2 March, four weeks after the opening of the scheme. Dr. Byrne has said Ulster Bank closed the scheme after two weeks. The window of opportunity for farmers to avail of the loans was extremely narrow. How much more demand do the banks believe there was for the scheme? I was approached by a number of farmers. At that time of the year they are busy and do not frequent their banks on a regular basis. When they inquired about the scheme, it had closed. If more funding had been available, would there have been a greater take-up?

The scheme was introduced because of the poor product prices in 2016. I cannot understand the poor take-up of the scheme by farmers in the tillage and pig sectors. Is it because they applied and were refused on the basis of their repayment capacity or did they just not apply? Are they considered to generate such poor returns for the banking sector that they knew an application would not bear fruit? Last week we received a presentation from the SBCI which also referred to these sectors. In particular, the officials referred to the horticulture sector and the financial difficulty growers got into following the Brexit referendum. It is hard to understand how there has not been a great drawdown by producers in these sectors under the scheme.

Perhaps I am wrong, but I thought the scheme was introduced to address existing merchant debt and farmers who had financial problems as a result of the 2016 crisis when product prices fell. I did not think it was a scheme to provide stocking loans in 2017. Ulster Bank outlined clearly that it was used for such loans this year. My interpretation of the presentations made to the committee by the Minister and the Department is that such loans were not envisaged under the scheme. I have concerns that it was used by the banks for business that they would have been doing in the normal course with farmers this year.

It was certainly not my understanding and it is the one point in the presentations today with which I have serious difficulty. I would like a discussion about it. Merchant credit bills, super levy bills and even tax bills with Revenue were built up due to cashflow problems in various sectors in 2016. That was my understanding of why this was introduced whereas this is definitely not something for which I envisaged the scheme would be used. I would like to hear the views of the three banks as to why it was used for the purpose of stocking loads for 2017. That is not my understanding of the purpose of the scheme. The three banks have in common the fact that the scheme closed very quickly within them. Can they give us a handle on how much more demand is out there?

The duration of the loans is the other issue with the way the interest subsidy will work. I have definitely had a number of farmers on to me who were unhappy at the duration of the loans they received. They felt there was significant pressure placed on them by financial institutions to reduce the loan terms. From a cash-flow point of view for farmers, the longer the loan goes on at this interest rate, the more beneficial it is for their businesses. I might have missed the data but AIB definitely indicated that 72% of the loans were over four years. Bank of Ireland said the average loan term was 31 months. There was definitely an emphasis on reducing the terms of the loans. What are the banks' views on that?