Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I am pleased to have this opportunity to address the House on this important issue. I fully acknowledge and accept there are ongoing difficulties being experienced by the farming community, not least by our tillage farmers.The Minister for Agriculture, Food and the Marine, Deputy Michael Creed, is aware of the specific difficulties in County Cork and other coastal locations that some tillage farmers experienced this year at harvest as a result of sea mist.

This sector is an important area in the agricultural economy but it has been a challenging year both in terms of market returns and variable weather conditions experienced during the harvest. The Minister recently chaired a meeting with the main stakeholders in the tillage sector. At the time, the Minister said this meeting provided a platform for the stakeholders to express their views and concerns on the challenges they are facing but, equally, to discuss the opportunities that lie ahead for the industry. At that meeting the Minister outlined that one of his chief priorities was to provide low-cost and more flexible finance.

In this regard, he was happy to announce on budget day plans for a €150 million agri-cash flow loan support scheme. This financial instrument has been developed in conjunction with the Strategic Banking Corporation of Ireland by leveraging EU and Exchequer funding totalling €25 million from the Department to deliver a total loan fund of €150 million. This will support highly flexible loans for up to six years for amounts up to €150,000. The interest rate applying is 2.95% and the product will be available to livestock, tillage and horticulture farmers. Loans to tillage and horticulture farmers will be provided in line with the EU's agriculture state aid de minimisrequirements.

This is a cash flow support facility to improve the working capital position of farmers and other viable primary agriculture small and medium-sized enterprises, SMEs. The loans are primarily to pay down expensive forms of credit such as merchant credit and other short-term financing facilities such as overdrafts. Last week. The Minister welcomed the Strategic Banking Corporation of Ireland open call for financial intermediaries to deliver the scheme, which will be operational as early as possible in 2017.

The loan scheme is part of a three pillar strategy in response to income volatility that was announced in the recent budget, along with additional tax measures and farm payments. Among the tax measures agreed with the Minister for Finance was an adjustment to the current income averaging system, which will allow for an opt-out in an exceptional year. This will be available immediately for this year's tax liability and will go some way towards addressing current cash flow concerns.

As an additional support to cash flow on farms, including tillage farms, advance payments would be made this year in respect of the basic payment and greening payment schemes. Advance payments commenced on 17 October last, the earliest possible date by which payments can begin under the governing EU regulations. Up to last week, €786 million has been paid out to 119,904 farmers and payments are ongoing.

I am also pleased to note the processing of the areas of natural constraints payment scheme is on schedule and payments have already commenced during the third week in September. It is expected approximately 96,500 will fulfil the scheme eligibility requirements. The Department will also be opening a targeted agricultural modernisation scheme specifically for the tillage sector.

The Minister also stressed at the recent tillage stakeholders meeting that, in this changing landscape, we need to take a fresh look at our tillage industry to ensure that it is best positioned to withstand possible future threats and to avail of the new opportunities which may present themselves.

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