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

In his budget speech, my colleague, the Minister for Finance and Public Expenditure and Reform, Deputy Paschal Donohoe, formally announced progress in the development of a key Government Brexit response, the future growth loan scheme for small and medium enterprise, including the primary agriculture and seafood sectors. This is a long-awaited source of finance for young and new entrant farmers, especially the cohort that does not have high levels of security. It will also serve smaller scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution. Food companies have identified long-term investment finance of up to ten years as a critical need currently unavailable in Ireland. I am pleased that the Government has been able to deliver this product and its effects will be felt all along the food production chain.

My Department is providing 40% of the funding so an overall agrifood package of €120 million will be available. However, unlike previous schemes, this can be reviewed and adjusted according to demand. Further details will be provided in the coming months. The scheme is expected to be in place in early 2019 and will run for three years from its launch date. The funding required to prime this measure will be paid by my Department in 2018.

With respect to cash flow pressures arising from the effects of the weather on grazing and fodder stocks, the agreement I secured from Commissioner Phil Hogan to make higher advance payments this autumn will result in a very substantial €260 million in additional cash flow for farmers shortly. I have had ongoing engagement with the banks in this regard. I am pleased to see that this engagement and the delivery of last year’s agriculture cash flow loan scheme has acted as a catalyst to encourage financial institutions to improve and develop new products for the sector. A recently announced initiative by one of the main banks mirrors the scheme in offering a discounted interest rate with extended and flexible repayment terms. All three main banks have dedicated offerings in response to the current position and co-ops have introduced recent initiatives on credit facilities for their suppliers. A spending review of the agriculture cash flow loan scheme, published with the budget, concluded that this was one of the main impacts of the scheme. In the context of these new and improved supports in this area, the focus of the Government has been to address market gaps, the most critical of which has been identified as unsecured longer term investment finance.

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