Michael Healy-Rae (Kerry South, Independent)
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94. To ask the Minister for Agriculture, Food and the Marine his plans to introduce the low-interest loans to farmers, as announced in June of 2015; and if he will make a statement on the matter. [38633/15]

Simon Coveney (Cork South Central, Fine Gael)
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Earlier this year, the European Commission and the European Investment Bank (EIB) presented a model guarantee instrument for agriculture, developed with in the framework of their Memorandum of Understanding on co-operation, to help ease access to finance for farmers and other rural businesses. Member States and regions can adapt and use this model to set up financial instruments funded by their rural development programmes (RDPs) under the European Agricultural Fund for Rural Development (EAFRD). Financial instruments can take the form of loans, guarantee funds or equity investments. The funding for any such financial instruments would have to draw on Ireland’s existing RDP allocation of EAFRD funding, as well as National Exchequer funding. In our RDP, we have made a commitment to examine the potential for the use of financial instruments. However, the inclusion of financial instruments by way of a modification to the RDP is required by EU regulation to be based on an ex ante evaluation, which must assess:

- The existence of a market failure;

- The potential for added value;

- The resources required to implement a proposed financial instrument; and

- The proposed strategic approach to financial instruments.

In addition to this, my Department has been exploring new and more competitive sources of funding and will continue to do so in the context of evolving market requirements. The Strategic Banking Corporation of Ireland (SBCI) was established by the Government as a strategic SME funding company and includes the EIB as one of its funding partners. Among its range of products is an ‘Agriculture Investment Loan’, available for investment by agricultural SMEs (including farmers) involved in primary agricultural production, the processing of agricultural products or the marketing of agricultural products. The features of these products are lower interest rates compared with those currently on the market, loan amounts up to €5m and increased repayment flexibility. Of the almost €45 million in loans approved and drawn down by SMEs between March and end-June from the SBCI, a third had been accessed by the agricultural sector.