Martin Heydon (Kildare South, Fine Gael)
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66. To ask the Minister for Agriculture, Food and the Marine his plans for another phase of low cost loans for farmers in view of the success of the previous scheme; and if he will make a statement on the matter. [41616/17]

Michael Creed (Cork North West, Fine Gael)
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One of my priorities has been to address the impact of the volatility in the sterling exchange rate and lower commodity prices in some agriculture sectors. I see lower cost finance as an effective way of doing this and we developed the “Agriculture Cashflow Support Loan Scheme” with the Strategic Banking Corporation of Ireland (SBCI).

The Scheme made €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, allowing them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

The SBCI have recently reported that, to the end of August 2017, there have been 3,920 loan drawdowns amounting to a total of €128,199,316. This is an average loan amount of €32,704. Some 57% of the loans are for terms of 3 years or more. The participating banks have advised that all of the remaining €150m is committed and is in the process of being 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 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.

I believe that this scheme demonstrates the importance of lower cost and more flexible finance as a response to competitive pressures, and I hope that it will be a model for possible future measures.