Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

My Department has been exploring new and more competitive sources of funding for Irish agriculture and will continue to do so in the context of evolving market requirements. For example, the Strategic Banking Corporation of Ireland, SBCI, which includes the European Investment Bank, EIB, as one of its funding partners, has recently announced a new agriculture investment loans product. This credit is available at favourable terms for investments by agricultural SMEs involved in primary agricultural production, the processing of agricultural products or the marketing of agricultural products. The features of these products compared with those currently on the market are lower interest rates, loan amounts of up to €5 million and increased repayment flexibility. Of the almost €45 million in loans approved and drawn down by SMEs between March and the end of June from the SBCI, a third has been accessed by the agricultural sector. Things are already happening.

As to the EIB itself, earlier this year, the European Commission and the EIB presented a model guarantee instrument for agriculture, developed within the framework of their memorandum of understanding on co-operation in agriculture and rural development within the EU. The model instrument aims to help to ease access to finance for farmers and other rural businesses. Member states and regions can adapt and use this model to set up financial instruments funded by their rural development programmes, RDPs under the European Agricultural Fund for Rural Development, EAFRD. Financial instruments can take the form of loans, guarantee funds or equity investments. The funding for any such financial instruments would have to draw on Ireland’s existing RDP allocation of EAFRD funding as well as national Exchequer funding. It is also possible to incorporate funding from other sources for such instruments.

In our RDP we have made a commitment to examining the potential for the use of financial instruments. However, the inclusion of financial instruments by way of a modification to the RDP is required by EU regulation to be based on an ex anteevaluation which must assess the existence of a market failure, the potential for added value, the resources required to implement a proposed financial instrument and the proposed strategic approach to financial instruments. In other words, it is possible but work is required.

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