Michael McNamara (Clare, Labour) | Oireachtas source

Some time ago, a specific scheme for financial instruments in agriculture and rural development was agreed by the European Investment Fund. Together with Deputy Doyle, the Chairman of the Joint Committee on Agriculture, Food and the Marine, I met Commissioner Hogan in Brussels and this scheme was one of the good news items he announced to us. While he came to Ireland and spoke favourably of the scheme, I seek to ascertain what is going on between the Minister, Deputy Coveney, and Commissioner Hogan. Where is the money? There is considerable investment in agriculture in Ireland. One hears about how well performing it is and I am delighted it is performing so well. As 61,000 new jobs have been created in Ireland in agriculture, forestry and fisheries since 2013, by any stretch this is a sector that is performing well.

Many farmers are prepared to put their money into agriculture in the future and as the Minister of State is aware, the targeted agricultural modernisation scheme, TAMS, is oversubscribed. This is a scheme whereby a relatively small grant is made towards capital investment in farms such as farm buildings, etc. The Department was obliged to go through the applications before Christmas - I should put on record I am glad it did - to identify and deal with those applicants who were seeking new investments in dairying, such as the building of new milking parlours. Obviously, as cows are calving at this time of year and are beginning to start milking, work must be done and there was a certain amount of bureaucracy in the Department that delayed it. Nevertheless, all these farmers are investing all this money and are borrowing it from the banks at normal business rates. A rate of approximately 6.5% is the average for unsecured loans whereas a rate of approximately 4% obtains if the loan is secured. However, Commissioner Hogan mentioned a rate of 1.5% and Members can imagine the difference such a rate would make to Irish farms.

The Minister, Deputy Coveney, refers to productive farmers and appears to think that farmers from where Deputy Fitzmaurice and I come are not productive farmers, but are the ones who are waiting to be taken over by a productive farmer. I do not accept the Minister's conceptualisation of Irish agriculture. I note it is not his alone but also is the direction in which the Department of Agriculture, Food and the Marine has been going for nigh on 15 years through successive Governments. However, even by the Minister's own definition of what amounts to a productive farmer, he is failing them because the people who are investing in big new slatted houses or big new milking parlours or who are buying land, becoming more productive and achieving economies of scale are borrowing huge sums of money. Moreover, they are doing so at rates of 4.5% if the loan is secured and 6.5% if it is unsecured. Why are such farmers unable to draw down money at a rate of 1.5%, when this is what was promised by Commissioner Hogan? I believe he made this promise in good faith. Some members of my party have taken issue with Phil Hogan and some of what he has done but he is on solid ground in this regard. He pointed to specific examples of these funds being drawn down in other European countries. One example he cited was Romania where huge amounts of money were made available. People obviously are able to leverage more money when interest rates are lower. They are able to borrow more or at least the cost of borrowing is lower for their businesses. Second, banks are prepared to lend more where a guarantee scheme is in place and I note this is a guarantee scheme. However, it is not being availed of in Ireland and I wish to know why not.

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