Thomas Byrne (Meath East, Fianna Fail)
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656. To ask the Minister for Agriculture, Food and the Marine when low-cost loans for tillage farmers will be available following the announcement in October 2016. [17607/17]

Michael Creed (Cork North West, Fine Gael)
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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. Therefore I was pleased to announce the launch of the “Agriculture Cashflow Support Loan Scheme” on 31st January. The Scheme, which was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI), makes €150 million available to farmers throughout Ireland at interest rates of 2.95%. Distributed and administered through AIB, Bank of Ireland and Ulster Bank, it provides 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.

The loans are available to all livestock farmers, tillage farmers, horticulture producers and others involved in primary agricultural production. My Department is contributing €25million in total, which includes €11 million from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’ and €14 million in national funding. 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 banks will report on progress to the SBCI on a regular basis. Although no official returns have been made to my Department as yet, 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.

I am 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 am meeting with the Chief Executives of the banks shortly to discuss this and other issues relating to access to finance in the agri-food sector.