Written answers

Tuesday, 10 October 2017

Department of Agriculture, Food and the Marine

Budget 2018

Photo of James BrowneJames Browne (Wexford, Fianna Fail)
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485. To ask the Minister for Agriculture, Food and the Marine if budget 2018 will offer low cost loans for farmers to meet their ongoing capital requirements and on-farm investment; and if he will make a statement on the matter. [43015/17]

Photo of Michael CreedMichael 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.

Photo of James BrowneJames Browne (Wexford, Fianna Fail)
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486. To ask the Minister for Agriculture, Food and the Marine if budget 2018 will meet the programme for Government commitment to increase ANC funding by €25 million; and if he will make a statement on the matter. [43017/17]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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The Areas of Natural Constraint (ANC) Scheme is a very important source of financial support for farmers across the country, paying over €200 million each year to over 95,000 farmers.  The Programme for a Partnership Government provides for a commitment of a €25 million increase in funding for the Scheme in 2018.  This now falls for consideration in the context of discussions on Budget 2018.

There are a number of options in relation to how any additional funding could be allocated under the ANC.  These options range from allocating the funds as a flat increase across the current payable rates, to various forms of targeting higher payment rates for particular categories of farmers.  Any changes would require formal agreement with the EU Commission via a formal amendment of the Rural Development Programme, 2014 - 2020.

The 2017 ANC payments commenced on 19th September and to date, €176 million has been paid to in excess of 81,500 farmers. Payments are continuing on a rolling basis as more farmers satisfy eligibility and stocking rate requirements. 

I am pleased to note that 2017 payments are ahead of where they were this time last year.

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