Éamon Ó Cuív (Galway West, Fianna Fail)
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7. To ask the Minister for Agriculture, Food and the Marine the amount of money available for lending to Irish agriculture, rural development and farming from the European Investment Bank; when applications will be taken for this funding; the rate of interest to be charged; and if he will make a statement on the matter. [34221/15]

Éamon Ó Cuív (Galway West, Fianna Fail)
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I understand money is potentially available from the European Investment Bank, EIB, in two ways, one of which is making money directly available to SMEs. Can the Minister clarify whether that money is also available to individual farmers? The second element is the possibility of a measure under the rural development programme. Perhaps the Minister could outline his position on that. Many farmers thought they would get access to EIB money.

Simon Coveney (Cork South Central, Fine Gael)
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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.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I refer to my question on the EIB. The Minister's reply, which is similar to one I received yesterday, refers specifically to SMEs. Can the money be accessed by individual farmers for ordinary farming business or is it limited to SMEs, as we understand them? If one was to avail of the second fund, would the RDP have to be adjusted and the funding for existing RDPs reduced? Would it be a question of robbing Peter and paying Paul? Has the Minister commissioned the ex antereport? From what he said, I understand he would have to do that before making progress with the European Union. I have three specific questions, and perhaps this time I could get specific answers rather than the Minister rambling all around the world, not answering questions and wasting time.

Simon Coveney (Cork South Central, Fine Gael)
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I gave the Deputy fairly specific answers, but the problem is that a lot of the time he does not like the answers.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Minister never gives us answers. He was there for two minutes, but never actually answered the question.

Simon Coveney (Cork South Central, Fine Gael)
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The truth is that the solutions we are putting in place are not those the Deputy would put in place, which would, by and large, be to the detriment of agriculture. The kind of innovative thinking we are now talking about with the EIB is not the kind of thing on which the Deputy would have focused. My understanding is that primary food producers and SMEs, including farmers, can access the SBCI money. I met Ulster Bank and Bank of Ireland at CEO level yesterday to discuss some of the things they are doing in this area and I will meet AIB tomorrow.

In terms of the RDP, we have a set amount of money we can spend, namely, just under €4 billion. The EIB is trying to complement that spend. People who are using grant aid to upgrade their farmyards, for example, should be able to borrow the balance from competitive funds that can be put in place to do that. If we can show there is market failure in certain areas, in other words, that farmers or the agricultural industry cannot get competitive finance in the normal way or we can show that there is the potential for added value to an investment in a certain area, and if that is consistent with EU policy, which is always a test for EIB investment, we should be able to draw down money to do that. Such money would probably come through the existing banking system, as is the case with the SBCI, or perhaps through new financial models for farmers. That is yet to be put in place.

Éamon Ó Cuív (Galway West, Fianna Fail)
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One thing I learned was that when civil servants write replies they tend to be quite careful with the wording. The Minister's reply uses the phrase "SMEs" twice. Individual farmers are not normally referred to as SMEs. Could the Minister find out in the next two days whether farmers can access funding from the SBCI and write to me and other Opposition spokespersons with the information? The reply he gave to my question seems to be at variance with what he just said.

My second question was whether the Minister has started on the ex antereport, because I understand it is the first step on the road and if it is not done we cannot go anywhere. It was a very specific question. Has he commissioned the ex ante report? It is no good discussing EIB funds and their fantastic benefits unless we take the first step on the road. To say that money is available at competitive rates from the banks here, when the variable rates are crazy compared to what is available in Europe, shows that the Government has failed to deal with variable rates.

Simon Coveney (Cork South Central, Fine Gael)
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I can certainly provide the Deputy with what he needs. Many farmers do consider themselves SMEs.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I wonder is that the definition because it a funny word for an official to use.

Simon Coveney (Cork South Central, Fine Gael)
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What I said in my answer is that 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 have been accessed by the agricultural sector.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Minister's officials meant farmers.

Simon Coveney (Cork South Central, Fine Gael)
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I think so, but I can confirm that for the Deputy. As usual, he sees a conspiracy around every corner.

On the second issue, the wording of the rural development programme being submitted to the Commission includes a provision to draw down EIB money, but we will need to follow through with a more exact commitment to do this. This is the type of ex anteevaluation that the Deputy is speaking about.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Has the commissioning of the report started? Yes or no.

Simon Coveney (Cork South Central, Fine Gael)
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I agree with the Deputy on one thing, which I made clear last night: the interest rates charged to farmers in Ireland - and agriculture represents a very large percentage of the loan book in all three of our pillar banks that lend to agriculture - are not as competitive as they should be. If we could get EIB funding into Ireland, we may be able to force this down through competition, which is the most likely way to get a significant reaction.