Seán Fleming (Laois, Fianna Fail)
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617. To ask the Minister for Agriculture, Food and the Marine if the Exchequer ultimately covers the cost of potential defaults under the new agri-loan credit fund for unsecured loans to be provided via a company (details supplied); if any calculations have been carried out by the Government and the company to estimate the default costs it may give rise to; and if he will make a statement on the matter. [3846/17]

Michael Creed (Cork North West, Fine Gael)
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I am pleased to announce the launch of the “Agriculture Cashflow Support Loan Scheme” today. One of my priorities has been to address the impact of the change in the sterling exchange rate and lower commodity prices in some sectors, which have caused cash flow difficulties for farmers. The Scheme was developed in co-operation with the Strategic Banking Corporation of Ireland (SBCI), which has confirmed that AIB, Bank of Ireland and Ulster Bank will distribute the loans, making €150 million available to farmers throughout Ireland at low-cost interest rates of 2.95%. It will provide farmers with a low cost, flexible source of working capital and will allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

This Scheme is supported by €25 million being provided by the Department, including €11 million in EU ‘exceptional adjustment aid’. Working with the partner financial institutions, SBCI uses the public money to leverage the total of €150 million, enabling them (along with COSME, the EU programme for the Competitiveness of Enterprises and SMEs) to provide the guarantee required to underpin the loan’s flexibility, and lower the cost of the loans. The SBCI has undertaken extensive research, due diligence and analysis during the design of the Scheme.