Martin Heydon (Kildare South, Fine Gael)
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10. To ask the Minister for Agriculture, Food and the Marine the status of the provision of low cost funding for farmers; the number of farmers he expects that will benefit from the new initiative; and if he will make a statement on the matter. [4875/17]

Michael Creed (Cork North West, Fine Gael)
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I was pleased to announce the launch of the “Agriculture Cashflow Support Loan Scheme” on Tuesday. 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 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 loan scheme forms part of a “three pillar strategy” in response to income volatility, which I announced as part of Budget 2017. Along with tax measures and farm payments, it will alleviate some of the pressures being caused by the recent market difficulties, which have been compounded by the uncertainty around Brexit.

The loans will be available to all livestock farmers, tillage farmers, horticulture producers (including mushroom growers) and others involved in primary agricultural production (including poultry producers). The loans will be for amounts up to €150,000 for up to six years. The interest rate at 2.95% will represent a significant saving for farmers when compared with other forms of short term unsecured finance currently available. The loans will be flexible with interest only facilities of up to three years.

The SBCI has demonstrated its commitment to the agriculture sector and has worked with my Department to get this product to the market in a timely manner. I welcome the participation of the main banks, which will ensure nation-wide coverage for the scheme.  The fact that most farmers will have an existing relationship with the participating banks should facilitate the loan application process. Normal lending assessment criteria will apply although the loans will be ‘unsecured’ in nature, thereby facilitating a more straightforward application process. Potential applicants should note that the loans will be dispersed on a “first come, first served” basis and will need to be allocated by late summer 2017 to comply with the requirements attaching to the EU funding.

The number of farmers that will benefit will depend on the size of the loans. Loans are for amounts up to €150,000 but there is no minimum loan amount specified.