John Brassil (Kerry, Fianna Fail)
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408. To ask the Minister for Agriculture, Food and the Marine if an emergency compensation fund will be made available to grain farmers situated on the western seaboard who have had a poor year in terms of yield due to poor weather and are under severe financial hardship as a result; and if he will make a statement on the matter. [38449/16]

Michael Creed (Cork North West, Fine Gael)
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I fully acknowledge and accept that difficulties have been experienced by the farming community, not least by our tillage farmers. This sector is a very important area in the agricultural economy but it has been a challenging year both in terms of market returns and variable weather conditions experienced during the harvest.

I know the Deputy will be aware that I recently chaired a meeting with the main stakeholders in the tillage sector. As I said at the time and I wish to repeat here again this meeting provided a platform for the stakeholders to express their views and concerns on the challenges they are facing but equally to discuss the opportunities that lie ahead for the industry.

At that meeting, I outlined that one of my chief priorities was to provide low-cost more flexible finance and in this regard I was happy to announce on Budget Day, my plans for a €150 million Agri Cash Flow Loan Support Scheme. This has been developed in conjunction with the Strategic Banking Corporation of Ireland (SBCI), by leveraging EU and Exchequer funding totalling €25m from my Department, to deliver a total loan fund of €150 million, which will support highly flexible loans for up to six years, for amounts up to €150,000. The interest rate applying is 2.95% and the product will be available to livestock, tillage and horticulture farmers. Loans to tillage and horticulture farmers will be provided in line with the EU’s agriculture State Aid de minimis requirements.

This is a cash flow support facility, to improve the working capital position of farmers and other viable primary agriculture SMEs. The loans will be unsecured and are primarily to pay down expensive forms of credit such as merchant credit and other short-term financing facilities such as overdrafts. I recently welcomed the SBCI “Open Call” for financial intermediaries to deliver the Scheme. The SBCI is targeting that the loans will be available in the market in January 2017. I am encouraging farmers to consider their cash flow and borrowings situation now and, if appropriate to their circumstances, to be prepared to apply for these loans when they become available.

The loan scheme is part of a “three pillar strategy” in response to income volatility that I announced in the recent Budget, along with additional tax measures and farm payments. Among the tax measures, I agreed with my colleague the Minister for Finance, for an adjustment to the current ‘Income Averaging’ system, which will allow for an opt-out in an exceptional year. This will be available immediately, for this year’s tax liability, and this will go some way towards addressing current cash flow concerns.

As an additional support to cash flow on farms, including Tillage farms, I also confirmed that advance payments would be made this year in respect of the Basic Payment and Greening Payment schemes. Advance payments commenced on the 17th October last, the earliest possible date by which payments can begin under the governing EU Regulations, with balancing payments from the 1st December. 

Furthermore Balancing Payments commenced on 1 December and to date €1,126 billion has been paid out to 120,926 farmers and payments are ongoing. I was also pleased to note that the processing of the Areas of Natural Constraints payment scheme is on schedule and payments have already commenced during the third week in September. It is expected that approx 96,500 will fulfil the scheme eligibility requirements. My Department will also be opening a measure under the TAMS Scheme specifically for the Tillage Sector.

While there is no specific funding available for losses due to poor weather conditions I wish to confirm that at Agriculture Council I have repeatedly called for the situation on agricultural markets to be kept under ongoing review, and have said that we should be ready to deploy support measures if the circumstances require it. At the October Council Minister of State Doyle followed this up with a specific request that market support efforts be extended to the cereals sector.

I also stressed at the recent Tillage stakeholders meeting and I want to restate my view that in this changing landscape we need to take a fresh look at our tillage industry to ensure that it is best positioned to withstand possible future threats and to avail of the new opportunities which may present themselves.