Mr. Nick Ashmore:

I thank the Chairman and members for the opportunity to appear before the committee once again in order to discuss the work of the SBCI and its role in supporting farmers and agribusinesses throughout Ireland, many of whom are facing the challenge of dealing with fodder shortages and the consequences of the exceptional weather conditions we have witnessed this year.

I have previously briefed the committee on the two main channels the SBCI has used to support farmers and agribusinesses. To recap briefly, the first of these, the agriculture cashflow support loan scheme delivered €145 million in lowcost working capital loans with an interest rate of 2.95% to over 4,000 primary agriculture businesses throughout the country. This scheme reached capacity within weeks of its launch, with a strong mix of farm categories benefiting. Dairy farmers accounted for 45% of the total; beef farmers 40%; tillage 6%; and others - primarily pigs, sheep and horticulture - 9%. There was also a broad based geographical mix with a particularly strong uptake on the southern and western seaboards and in Border counties.

Our second major channel is our network of eight on-lending institutions, which have provided close to €860 million in low-cost, flexible loans, of which a quarter has been drawn down by farmers and agribusinesses. Taking these two channels together, the SBCI has deployed or supported the deployment of €1 billion, of which 36% has gone to the agricultural sector, since it first opened for business three years ago.

In addition, the SBCI recently launched the €300 million Brexit loan scheme, which is there to support businesses impacted by Brexit, especially food businesses which are often customers of the farming sector. This scheme is at an early stage but we expect that as further detail emerges on the precise nature and shape of the UK’s future relationship with Ireland and the wider EU, many more agribusinesses will be able to make informed decisions about their strategy for managing Brexit-related challenges and how best to finance that strategy. We expect the Brexit loan scheme will be an important tool for agribusinesses and food processors as they innovate to prepare for and respond to a post-Brexit world over the next two years.

Looking ahead to future supports that might be available for farmers, it may be helpful for the committee if I share some elements of the market research we commissioned recently to better understand the requirements of the farming and agribusiness sector. We targeted this research towards farmers who benefited from the agriculture cashflow support loan scheme, with parallel work to get valuable feedback from farmers who did not access the scheme and identify any measures that would make it easier for these farmers to access SBCI-driven supports. The key things we learned were that four in five farmers received the loan for the length of time and of the scale they required. The loan scheme was mostly used for replacing high-cost merchant credit and other working capital needs. A large majority of the loans were under €30,000 indicating a wide spread across the spectrum of size of farmers. Three in four farmers who have accessed the loan scheme rate it highly, with little disparity between farm type, size, or region. Some 83% of scheme participants found it to be an effective support. This satisfaction was spread across farm types and sizes, and had good regional spread. Some 94% expressed interest in accessing a similar scheme in the future. Our research also indicates clear demand for long-term investment funding from farmers.

I have another comment I would like to add in light of some of the questions put to the Minister earlier. We also looked at the reason why the group that we asked who did not get the loans did not access them. Of these, 62% said they were not aware of the loans; 34% said there was no need for the loans; 3% said they did not qualify or meet the criteria; 2% said that when they went to apply, it was no longer available; and a further 2% had other reasons.

That concludes my opening remarks. I hope the committee found them helpful and I will be happy to take any questions members may wish to pose.