Bernard Durkan (Kildare North, Fine Gael)
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Question 435: To ask the Minister for Jobs, Enterprise and Innovation if it might be possible to offer partial known guarantees to viable pig producers who are faced with restricting existing debt and compliance with animal welfare legislation; and if he will make a statement on the matter. [17825/12]

Richard Bruton (Dublin North Central, Fine Gael)
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The Temporary Partial Credit Guarantee Scheme is to operate under the De Minimis State Aid rules as agreed by the Government in November. The De Minimis State Aid framework provides a basis for swift implementation of such a Scheme.

Operating within the scope of the De Minimis State Aid regulations places limits on the range of options available in terms of the extent and pricing of the support which can be provided. It also places some limitations on the business sectors and loan purposes which the Scheme can support. Primary production in agriculture, horticulture and fisheries are excluded from the scope of the scheme in the light of particular restrictions under the De Minimis State Aid rules.

The relevant regulations are:

Commission Regulation (EC) No 1998/2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid

Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees (2008/C 155/02)

Furthermore, the Scheme is a targeted intervention to address specific market failure where a business is unable to secure lending due to a lack of security required for conventional collateral based lending.

The evidence is that currently, the agricultural sector is not experiencing a significant market failure in relation to collateral based lending in comparison to other industry sectors. The Government agreed that the absence of security was less likely to be an issue in agriculture than in many other sectors, as at least for owner farmers there would be the underlying asset of the farmland and buildings, and thus there would be proportionately fewer agriculture borrowing propositions to which the principal underlying rationale for the Scheme would apply.