Róisín Shortall (Dublin North West, Labour)
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Question 93: To ask the Minister for Agriculture, Fisheries and Food if his attention has been drawn to the fact that many dairy farmers will not be able to meet bank interest bills in the coming months due to the crisis in the sector and will require extra working capital to cover increases in farming costs; and if he will make a statement on the matter. [26075/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The dairy sector downturn has its roots in the supply response that resulted from high prices in 2007 and in the early part of 2008. That situation was then exacerbated by the international financial crisis. This has had a major effect on the demand side. My efforts have focused on ensuring that the full range of market management supports would be made available at EU level. As a result significant measures have already been taken at EU level to support the dairy sector. These include the activation of a range of dairy market management measures including private storage aid for butter and intervention for butter and skimmed milk powder. In addition, export refunds are available to support the export outside the EU of butter, skimmed milk powder, whole milk powder and cheese. Irish processors are availing of all these schemes.

Difficulties with access to credit have intensified what was a cyclical downturn into a major reduction in international demand for dairy products. The Government's efforts over recent months in addressing the banking sector have had a central focus on the needs of the wider economy. A proper functioning banking sector is central to our economic recovery, as this will facilitate appropriate lending to our businesses, including farmers.

There are instances being reported of viable businesses being refused credit and some representative bodies are suggesting such refusals are in the majority. As against this, banks are reporting refusals are slight and that falling demand for credit accounts for reduced lending levels. There is a perception that there is limited credit availability and this can be damaging at a time of fragile business and consumer confidence.

As part of the banks' recapitalisation package, the Government decided to have an independent review of bank lending to try to have an objective assessment of the current lending situation. This process is underway and although originally only the two recapitalised banks agreed to participate and fund the review, now all the six leading banks are engaged in the project. The results of this review will be available shortly and this should allow all stakeholders have an objective view of the state of lending.

The recapitalisation package also included many supports for enterprises. Irish SMEs are covered by the Code of Conduct on Business Lending to SMEs. This Code was published by the Financial Regulator and came into effect from 13 March 2009. Lenders covered by the Code are required to offer their customers an option for an annual review meeting, to include all credit facilities and security, including collateral. Banks are also required to treat all credit applications on their merits, to inform customers of the basis for decisions made and to have written procedures for the proper handling of complaints. Where a customer gets into difficulty the banks will seek to agree an approach to resolve problems and provide reasonable time and appropriate advice. Those applying for bank facilities, therefore, have a direct means to enquire from their banks why lending decisions are being made and to challenge any unreasonable terms being applied through the formal complaints procedure. Responsibility for the operation of the code rests with the Financial Regulator.

The Minister for Finance and the Tánaiste and Minister for Enterprise, Trade and Employment have established a Credit Supply Clearing Group with bank, business and State representation. This Group is responsible for identifying patterns of events where the flow of credit to viable businesses appears to be blocked and for seeking to identify credit supply solutions relating to these patterns. The Group is, however, not an appeals mechanism for cases where credit has been refused by the banks. Individual business decisions remain the responsibility of the banks. The Group met for the first time on 28 May 2009 and will next meet following the conclusion of the Independent Review of Bank Credit.

Individuals who have difficulty in getting access to bank credit should approach their banks to ascertain the reason for such refusals and should consider to what extent the relevant bank is operating within the Code of Conduct on Business Lending to SMEs. If the Deputy is aware of any pattern of events within the farming sector where the flow of credit to viable business appears to be blocked, information on these patterns can be sent to the Credit Supply Clearing Group care of the Department of Enterprise, Trade and Employment.

In addition, my colleague, the Minister of State, Deputy Billy Kelleher, has commenced a series of eight regional meetings over the coming weeks with regional representatives of the major banks, business representatives from local chambers of commerce, ISME, SFA, IFA and the Irish Hotels Federation to gather first hand experience of bank lending. Local representatives from the various state agencies, Enterprise Ireland and Fáilte Ireland, will also attend. This will feed into the work of the CSCG and future Government policy.

John Cregan (Limerick West, Fianna Fail)
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Question 95: To ask the Minister for Agriculture, Fisheries and Food the level of investment made by him to date under the dairy investment fund; and if he will make a statement on the matter. [25956/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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A total of 19 capital investment projects were awarded Government grant assistance of over €114 million from the Dairy Investment Fund. This grant aid is geared to generating an estimated capital spend of €286 million in the Irish dairy processing sector and will play a key role in ensuring the long-term competitiveness of the dairy industry in Ireland.

Over €33 million in grant aid has been paid to date by my Department, through Enterprise Ireland, in respect of work already completed. The capital investment involved was over €80 million. It is anticipated that further investments, with capital spend in excess of €50 million, will be completed in the coming months.