Dáil debates
Thursday, 12 July 2018
Other Questions
Brexit Supports
11:40 am
Charlie McConalogue (Donegal, Fianna Fail)
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10. To ask the Minister for Agriculture, Food and the Marine the operational details of the various Brexit loan schemes announced in the budget for farmers, fishermen and food businesses in 2018; when it will open for applications; and if he will make a statement on the matter. [31070/18]
Charlie McConalogue (Donegal, Fianna Fail)
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The Minister will recall the announcement made in last year's budget in regard to a Brexit loan scheme to help farmers, small and medium enterprises and those in the agrifood sector prepare for the threat of a hard or soft Brexit. I ask the Minister to update the House on progress on that loan scheme and to clarify whether the size of the fund has been established and the percentage of it that will go to farmers. It will be long past the announcement of the next budget before anyone has the opportunity to draw down a loan from a fund which is supposed to help prepare for Brexit, which must take place by March of next year.
Michael Creed (Cork North West, Fine Gael)
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One of my priorities is to improve access to finance for the agrifood sector. Food Wise 2025 identifies competitiveness as a key theme and includes a recommendation that stakeholders work to “improve access to finance for agriculture, forestry and seafood producers and agrifood companies”.
I launched a new Brexit loan scheme on 28 March in cooperation with the Minister for Business, Enterprise and Innovation, Deputy Humphreys, and the Minister for Finance, Deputy Donohoe, which will provide up to €300 million of affordable, flexible working capital finance to Irish businesses that are or will be impacted by Brexit. The scheme will be available to small and medium enterprises, SMEs, and mid-cap businesses. In light of the unique exposure of food businesses to the United Kingdom market, my Department’s funding ensures that at least 40% of the fund will be available to them. The finance will be easier to access, more competitively priced at a proposed interest rate of 4% and on more favourable terms than current offerings. This will give businesses impacted upon by Brexit businesses time and space to adapt and grow into the future. The scheme will remain open until 31 March 2020. It is modelled on the agriculture cashflow support loan scheme which I made available to farmers in 2017.
I announced in budget 2018 that my Department is considering the development of Brexit response loan schemes for farmers and fishermen and longer-term capital financing for food businesses. Such schemes are developed and delivered in co-operation with the Strategic Banking Corporation of Ireland, SBCI, and take time to develop and put into operation. Consideration and discussions are ongoing in that regard and I will announce further details as they become available.
While continuing to explore additional funding mechanisms, I also liaise with the main banks on issues relating to the agrifood sector. All of the banks have specialised products available and expressed a commitment to servicing the future financing needs of the sector. The delivery of the Brexit loan scheme and last year’s agriculture cashflow support loan scheme can act as a catalyst to encourage financial institutions to improve and develop new loan products for the sector. The milk flex loans developed by the Irish Strategic Investment Fund, with dairy co-op and private banking participation, are a good example of innovation in this regard.
Charlie McConalogue (Donegal, Fianna Fail)
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On the funding announced by the Minister in budget 2018 and in light of the proximity of Brexit and the priority which must be given to responding to the threats and challenges it will present, for the Minister to come to the House and tell us that putting these loans together takes time and they will not be launched for some time is unacceptable in the context of the challenge facing Irish businesses and farmers.
The announcement that the funding would be put in place was made in October 2017. We are not far away from the point at which we will be a year on from that with the fund yet to be set up and accessible to farmers. Can the Minister provide the House with a clear outline as to when the funds will be available to be drawn down and accessed and when the fund will be open for applications? It has been a failure on the part of the Minister that a measure for which there is a great need has not been made available to farmers and small businesses.
11:50 am
Michael Creed (Cork North West, Fine Gael)
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Our track record in the context of the objectives set out in Food Wise 2025 strategy is strong. We had a €150 million loan scheme for farmers lending at 2.95%, we had the €300 million loan scheme and we are working on the detail of the next scheme which will make funds available to farmers for investment purposes. It is a significant start. There are a lot of moving parts in this. It is not solely an issue of the Department developing the product. A number of critical partners are involved, including parties with which we are negotiating at EU level. Those negotiations are complex and protracted and getting all parties to move on the design of the scheme simultaneously is challenging. In due course, this will also involve the participation of financial institutions in Ireland to deliver the product. I have always said it would be the second half of 2018 and I am still working to that deadline. I would like to have it as early as possible but I do not see it happening in the coming weeks. However, we are working on the detail.
Charlie McConalogue (Donegal, Fianna Fail)
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I note that the Minister said he had seen the Irish Farmers' Journalthis week. He will have seen how the SBCI clarified in a response to the IFA that it did not see farmers being able to access the loan scheme until March next year at the earliest. That is the first half of next year. We know it is complicated to put a loan scheme together, but it pales in significance to the complexity for businesses of meeting the challenge of Brexit. Surely, it should not have been beyond the Minister to have got everyone together to ensure this tool, which he announced in this year's budget, would be put in place and made available to farmers. Brexit will have taken place by the time some farmers are able to access this fund. Can the Minister clarify whether the report in the Irish Farmers' Journalis correct that it will be after March 2019 before farmers can access the fund?
Michael Creed (Cork North West, Fine Gael)
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I do not always believe every headline I read in the Irish Farmers' Journal.
Charlie McConalogue (Donegal, Fianna Fail)
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Can the Minister make more of a comment than that?
Michael Creed (Cork North West, Fine Gael)
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As I said earlier, our track record is that we have delivered two products to the market, one totalling €300 million earlier this year and a previous one totalling €150 million, and we are working on the third product. I have always said it would be the second half of 2018 before the product would be delivered.