Written answers

Tuesday, 24 May 2016

Department of Agriculture, Food and the Marine

State Aid

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick County, Fine Gael)
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515. To ask the Minister for Agriculture, Food and the Marine the progress he is making on the European Union Council of Ministers decision to allow for the drawing down of state aid by farmers in the dairy and other sectors, given the difficulties facing the sector; and if he will make a statement on the matter. [11165/16]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Given the ongoing difficulties faced by farmers in the dairy and other sectors, the Council of Agriculture Ministers agreed a further package of measures in March 2016. Among these was the making available of more flexible state aid support.

This additional flexibility would allow Member States to provide support to farmers up to a maximum amount of €15,000 per farm this year in circumstances where they either:

(i) made a commitment to freeze or reduce production compared to a given reference period, or

(ii) used the funds to bridge a liquidity gap.

Aid would be granted in the form of direct grants, loans or guarantees in the case of freezing/reducing production, and in the form of loans or guarantees in the case of liquidity assistance (remunerated in the form of an interest payment). The latter could also be provided in grant form if accompanied by a commitment to freeze or reduce production.

I do not plan to avail of the option to provide national funding to support the freezing or reduction of milk supply compared to a given reference period. Indeed, Ireland has been to the forefront in expressing its concerns about the linkage between access to new state aid flexibility and the requirement to control supply. On the question of liquidity, my Department is at present commissioning an ex ante appraisal to examine the merits of including a provision for financial instruments in its Rural Development Programme, and is continuing to engage with the banks concerning the provision of flexible finance to farmers.

My Department is also continuing to monitor market developments very closely, and will continue to work with the Commission and with other Member States in developing appropriate responses. Member States now have a suite of measures that have been made available since September 2015, and will respond in accordance with their domestic circumstances. To date Ireland has used the targeted aid package of €27.4m (€13.7m EU and €13.7m national funding) to support producers in the dairy and pigmeat sectors, and has pushed for appropriate changes in the operation of market support measures such as aids to private storage.

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