Michael Creed (Cork North West, Fine Gael)
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Last month I welcomed the release of preliminary information from the Strategic Banking Corporation of Ireland (SBCI) regarding the uptake of the Agriculture Cashflow Support Loan Scheme. The Scheme, which was developed by my Department in co-operation with SBCI, makes €150 million available to farmers at interest rates of 2.95%. Distributed and administered through AIB, Bank of Ireland and Ulster Bank, the Scheme provides farmers with a low-cost, flexible source of working capital and allows them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises. The SBCI reported that €60.2m has been drawn down by farmers to the end of April. The average loan size is €32,000, with more than half the loans being advanced for terms of four years or more.

The Scheme was devised to be a flexible as possible and it was up to the applicant to decide the purpose for which they used the loan according to the circumstances of the farming enterprise. Finance for trading stock is a normal working capital requirement for farmers and was eligible under the Scheme. The objective of the Scheme was to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors by lowering the cost of finance. There is a significant cost saving for those who decided to use this Scheme as a stocking loan.

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 have met with the Chief Executives of the participating banks to discuss this and other access to finance issues relating to the agri-food sector. I have asked the banks to respond positively to the demand that has been demonstrated by reducing interest rates and providing more flexible terms for cash flow loans in the future.

The banks advise that all of the remaining €150m is committed and is in the process of being drawn down. My Department is expecting another update on the progress of the Scheme from the SBCI shortly.