Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I announced earlier this month that the Strategic Banking Corporation of Ireland has invited financial institutions to take part in the agriculture cashflow support loan scheme. A number of applications were submitted by the closing date of 25 November. They will now be the subject of a formal approval process. This scheme will enable farmers to improve the management of their cashflow and reduce the cost of their short-term borrowings. The loan scheme forms part of the three-pillar strategy in response to income volatility that I announced as part of last month's budget. Along with tax measures and farm payments, it will alleviate some of the pressures being caused by the current market difficulties. The Strategic Banking Corporation of Ireland is targeting that the loans will be available in the market by the end of January 2017. The scheme, with total funding of €150 million, will support highly flexible loans for up to six years for amounts up to €150,000 at an interest rate of 2.95%. This rate will represent a significant saving for farmers compared to other forms of unsecured short-term finance that are available. The loans will be flexible, with interest-only facilities of up to three years. While normal lending assessment criteria will apply, the fact that the loans will be unsecured will facilitate a more straightforward application process. The public funding of €25 million provided for the scheme includes €11.1 million from the EU’s exceptional adjustment aid for milk and other livestock farmers. The need for this scheme has been identified. It is expected it will be fully drawn down.

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