John Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

439. To ask the Minister for Agriculture, Food and the Marine his views regarding the matter of loans to individual farmers from banks and financial institutions for the past three years, for which returns are available; the amount of total loans that are available; in view of concerns regarding falling commodity prices, if he has requested the banks to act cautiously, as some banks are concerned at the level of loans, and what they perceive to be trouble in the future; and if he will make a statement on the matter. [37866/15]

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Central Bank publishes figures on a quarterly basis for credit advanced to Irish-resident small and medium sized enterprises (SMEs). New lending and outstanding loans in the primary agriculture sector for the three years to the end of June this year, are as follows (in €millions):

Teagasc and Bank of Ireland launched a report earlier this year, “A Review of the Financial Status of Irish Farms and Future Investment Requirements”, which indicated that, relative to the EU average, Irish farms have low debt and high asset values. The average level of debt on all farms (farms with and without debt) in 2013 was €24,000. Dairy farms had the highest level of debt at an average of approximately €62,000 for all dairy farms. However, 34% of dairy farms have no debt at all – the average debt on the 66% of dairy farms that have loans outstanding is €94,000.

As part of the regular contact that I maintain with them, I recently met with the CEOs of the three main banks to discuss issues relating to the sector. All consider the sector to be vitally important to them and have specialised offerings to farmers, especially young farmers. I have stressed the need for them to be flexible in the context of increased income volatility and they all informed me that they are aware of the challenges facing farmers in this regard.

As well as the offerings from the main banks, the Strategic Banking Corporation of Ireland (SBCI) was established by the Government to deliver lower cost, long-term, innovative and accessible funding to Irish SMEs, by offering tailored flex ible products, through its ‘on-lending partners’ (currently AIB & Bank of Ireland). Their products include ‘Agriculture Investment Loans’ , available for investment by agricultural SMEs, including farmers, involved in primary agricultural production, the processing of agricultural products or the marketing of agricultural products. Of the almost €45 million of SBCI loans approved and drawn down since March, a third has been accessed by the agricultural sector.