Written answers

Tuesday, 5 July 2016

Department of Agriculture, Food and the Marine

Credit Availability

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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600. To ask the Minister for Agriculture, Food and the Marine if he is aware of the challenges facing the farming community with respect to accessing finance, particularly the variations in interest rates; the assistance his Department is providing to reduce these challenges; and if he will make a statement on the matter. [19550/16]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I am fully aware of the pressures on farmers right now and I have committed to working with all the stakeholders, both at national and EU level, to address these issues and ensure that we continue to have a sustainable and resilient sector. One of my priorities is to support the provision of lower-cost, more flexible finance. I recently met with the CEOs of the main banks and stressed the need for them to be flexible in the context of increased income volatility. The banks told me that they recognise and are responding to the challenges facing farmers in this regard. I also questioned the banks on the relatively high interest rates for SMEs in Ireland compared with those across Europe.

Access to finance was discussed at the Dairy Forum on 21 June, with an exchange of views with the main banks now a part of the agenda at each meeting. Before the meeting I formally launched the Dairy Forum’s ’Financial Management Initiative’, a programme of cash flow and financial management training and advice for dairy farmers. I believe that equipping farmers with better financial planning skills is essential and I am encouraging all farmers to engage with this initiative.

Access to finance was also discussed at last month’s meeting of the Food Wise 2025 High Level Implementation Committee and we heard from representatives of the Strategic Banking Corporation of Ireland (SBCI) and the Irish Strategic Investment Fund (ISIF). Both are now active in the market and my Department, in cooperation with all the other relevant State bodies, will continue to explore additional funding mechanisms for farmers, the agri-food sector and for SMEs generally.

In this regard, my Department has just published a request for tender to procure an ex-ante assessment to assess any current failures in the access to finance market in Ireland. This is a first step towards the potential introduction of Financial Instruments under the EAFRD Rural Development Programme and the EMFF Seafood Development Operational Programme.

In addition, the EU Commission has announced more flexible State aid provisions as part of the response to price volatility, including the possibility of a measure on bridging liquidity gaps. I am working with all the financial institutions, particularly SBCI, to identify potential solutions to providing working capital finance for farmers with liquidity issues.

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