John Brassil (Kerry, Fianna Fail)
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1031. To ask the Minister for Agriculture, Food and the Marine if he will increase the level of funding available for the cashflow support loan for farmers following reporting from banks due in mid March, in view of the level of applications already submitted; and if he will make a statement on the matter. [13114/17]

Michael Creed (Cork North West, Fine Gael)
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The “Agriculture Cashflow Support Loan Scheme” was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI), making €150 million available to farmers at interest rates of 2.95%. One of my priorities has been to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors. This Scheme is significant in this regard, providing farmers with a low cost, flexible source of working capital, which will allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

SBCI uses the €25 million of public funding provided by my Department to leverage the total amount of €150 million and, along with the European Investment Fund’s ‘COSME’ (the EU programme for the Competitiveness of Enterprises and SMEs), is providing the guarantee required to underpin the loan’s flexibility and lower the cost of the loans. The Scheme is administered through AIB, Bank of Ireland and Ulster Bank and they will report on progress to the SBCI on a regular basis, although no official returns have been made as yet. However all of the banks have confirmed that they have applications up to the amounts available under the Scheme. There may be some residual availability but this will only emerge as applications are processed and loans drawn down.

My Department’s contribution of €25million includes €11 million from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’. It was this exceptional aid package which facilitated the Scheme from an EU State Aid perspective, and additional funding is not possible under this particular arrangement. Other sectors, such as tillage and horticulture, were facilitated by national funding under the ‘de minimis’ State Aid rules.

I am very pleased at the very positive reaction by farmers to the Scheme, which has proved that significant demand exists for low cost flexible finance. I hope that the commercial banks will respond positively to this demand by reducing interest rates and providing more flexible terms for cash flow loans in the future. I plan to meet with the Chief Executives of the banks shortly to discuss this and other issues relating access to finance in the agri-food sector.