Charlie McConalogue (Donegal, Fianna Fail)
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3. To ask the Minister for Agriculture, Food and the Marine if he will provide operational details on the new SBCI agrifund; if he will provide a breakdown of funding sources and financial providers that will loan moneys to farmers; and if he will make a statement on the matter. [32462/16]

Charlie McConalogue (Donegal, Fianna Fail)
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I ask the Minister to provide the operational details of the new Strategic Banking Corporation of Ireland agrifund, including a breakdown of funding sources and also the financial providers who will lend money to farmers.

Michael Creed (Cork North West, Fine Gael)
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In view of the sustained period of lower commodity prices and the cashflow difficulties this has caused for farmers in several sectors, I have committed to working with all stakeholders at national and EU level to address the issues involved and to ensure that we continue to have a sustainable and resilient sector.  One of my priorities is to support the provision of lower-cost flexible finance. Therefore, I was pleased to announce on budget day plans for a €150 million agriculture cashflow support fund. The fund will support highly flexible loans of up to six years in duration for amounts up to €150,000 at an interest rate of 2.95%.  It will be available to livestock, tillage and horticulture farmers. The proposed interest rate will represent a significant saving to farmers when compared with other forms of finance currently available. The loan fund is part of the three-pillar strategy to respond to income volatility that I announced in the recent budget along with additional tax measures and farm payments.

Further details of the loan fund will be provided shortly, but it is expected that it will be operational as soon as possible in early 2017. The Strategic Banking Corporation of Ireland, SBCI, will make an open call for lending institutions to participate and I have spoken to the main banks to encourage them to make this facility available to their customers. Normal lending assessment criteria will apply although the loans will be unsecured in nature thereby facilitating a more straightforward application process. My Department and SBCI are breaking new ground with this innovative approach to delivering support to farmers. It is designed to maximise the leverage achieved on the funding available. The provision of €11.1 million in EU funding and €14 million in national funding by my Department will enable the SBCI to leverage the total fund of €150 million. I encourage farmers to consider their cashflow and borrowings situation now and, if it is appropriate to their circumstances, to be prepared to apply for these loans when they become available.

Charlie McConalogue (Donegal, Fianna Fail)
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There is a real dearth of detail in the Minister's reply on the start date and the criteria which will be in place for farmers who apply. I note the extent of the income pressure on farmers in the past week. We see it in beef and tillage at the moment and have seen it in the past year in the dairy sector and the mushroom sector.

Michael Creed (Cork North West, Fine Gael)
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What is the specific information the Deputy seeks?

Charlie McConalogue (Donegal, Fianna Fail)
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When exactly will it start?

Michael Creed (Cork North West, Fine Gael)
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In early January.

Charlie McConalogue (Donegal, Fianna Fail)
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The Minister said early 2017. We will hold the Minister to the early January 2017 date. It is much too late, however, because action is needed now. There is a real crisis in incomes across the farming sector and the support is not there for it as we speak. The Minister has also failed to provide detail today on the exact criteria to be met in order to apply for these loans. Will people be able to refinance existing loans? Will it specifically target merchant credit, which is due now, not next January? How are those farmers going to fare? Many tillage farmers were not able to salvage their crops or harvested crops which were not worth salvaging. When I brought this up with the Minister a few weeks ago seeking a specific fund, he said he would revisit the question once the harvest was in.

Maria Bailey (Dún Laoghaire, Fine Gael)
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I call the Minister.

Charlie McConalogue (Donegal, Fianna Fail)
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Will a specific fund be put in place for tillage farmers now? In fairness, they need a crisis fund, not more loans.

Maria Bailey (Dún Laoghaire, Fine Gael)
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I remind Deputy McConalogue of the time. To be fair to other colleagues, we will run out of time if Members continue to go over their allotted time.

Michael Creed (Cork North West, Fine Gael)
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Let it be clear that I am not encouraging farmers to borrow money. I am inviting them to avail of this option if it is appropriate. Whether the answer is to refinance existing loans will have to be looked at on a case-by-case basis. If there is a penalty for early payment of a loan, this may not be appropriate. If a farmer is making investments under TAMS next year, it might be appropriate. If a farmer has merchant credit, it might be more appropriate. Certainly, that may be so if a farmer has overdraft facilities at high interest rates. It is designed to be working capital. There will be a very simple credit application for an unsecured loan. A farmer will not have to put up the deeds to the farm to secure this loan. It is six-year finance at 2.95% and has an interest-only option for the first three years. It will be developed at the earliest possible date. My ambition is to have it in place in early January and the public call will go out from the SBCI shortly. What more information can I give? The interest rate is 2.95% and there is nothing like it in the market. It would be nice if the Deputy acknowledged the widespread welcome for this funding scheme. It is a new departure in terms of access to finance for the sector. It is available to the mushroom and tillage sectors.

Charlie McConalogue (Donegal, Fianna Fail)
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A tender will be issued to commercial banks, such as AIB and Bank of Ireland, to apply for the scheme. It will be Fianna Fáil's position that the Strategic Banking Corporation of Ireland should instead be licensed to provide funding directly to farmers and small businesses, in cases where they apply for separate funds.

The dearth of information continues. There is a total lack of clarity. In the Minister's first response to me he said it is hoped the scheme will be up and running in early 2017. When I pressed him on the matter, he gave a date of January, and he has now said it is his ambition that will be operational in early January. It is all very loose and does not give me any confidence that the fund will be in place for farmers at that point in time. It is very clear it is not in place for farmers now, when they actually need it.

I ask the Minister to respond specifically on the issue of tillage farmers. The Minister said he would reconsider the matter once the harvest was in because he did not want to interfere with the salvage operation and cause people to cease the salvage of crops. That time has now passed. It is clear that many farmers are in exceptional distress. They do not have the cashflow to pay merchant bills, other bills or even conacre bills because they have not harvested or stored crops or do not have tonnage to sell. Will the Minister put in place a crisis fund specifically for them?

Michael Creed (Cork North West, Fine Gael)
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The SPCI does not have the necessary network to deliver this loan product. It operates out of an office in Dublin and does not have a branch network. Those in Letterkenny, west Kerry or west Cork who want to access the loan product need access through a local financial institution. The SBCI will put out a call for partners to deliver the scheme. I have spoken to Bank of Ireland, AIB, and Ulster Bank. It is open to others. I was recently asked whether the scheme is open to credit unions - I suspect it is, if they can demonstrate a capacity to deliver the product in a manner that is acceptable to the SPCI. We want these institutions to be involved because they have the required network and existing exposure to and understand of the agricultural lending sector. Let us get the scheme up and running as quickly as possible.

Many tillage farmers have had a very difficult year. Since we last spoke, they have salvaged a lot of crops. Some of it was low yield and there was high moisture. I acknowledge it has been a very difficult year. I have met representatives from the sector and engaged with them in my Department this week. They are quite welcoming of the fact they will have access to this fund, in particular in the context of the TAMS tillage applications that will be available early in the new year. The schemes will work side-by-side in terms of access to finance to enable farmers to invest in projects in the tillage sector.

The Deputy has asked for a specific fund to bail out the sector. That is not permitted under state aid rules. What we are availing of de minimusis to extend the loan facility to the tillage sector.

Charlie McConalogue (Donegal, Fianna Fail)
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The Minister could have asked for an exemption.