Charlie McConalogue (Donegal, Fianna Fail)
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534. To ask the Minister for Agriculture, Food and the Marine the estimated amount in Exchequer funding required to counter guarantee a cash flow loan scheme to make available a similar loan fund as provided in the 2016 agriculture cash flow support loan scheme in the scenario in which no EU exceptional adjustment aid was available. [50667/18]

Michael Creed (Cork North West, Fine Gael)
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The Agriculture Cashflow Support Loan Scheme (ACSLS), was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI) and made €145million available to farmers throughout Ireland at interest rates of 2.95%. My Department contributed €25 million in total, which included €11.1 million from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’ under Commission Delegated Regulation (EU) 2016/1613 and €14 million in national funding. The SBCI used the €25 million to leverage the Scheme, funding an interest subsidy and guaranteeing first losses.

SBCI did not provide funding but, along with the EU’s ‘COSME’ (the EU programme for the Competitiveness of Enterprises and SMEs, administered by the European Investment Fund), provided the guarantee required to underpin the loan’s flexibility and lower the cost of the loans. The loans were distributed and administered through AIB, Bank of Ireland and Ulster Bank.

The delivery the ACSLS has acted as a catalyst to encourage financial institutions to improve and develop new loan products for the sector. A recently announced initiative by one of the main banks mirrors that Scheme in offering a discounted interest rate with extended and flexible repayment terms. The ‘Milk Flex’ loan product developed by the Irish Strategic Investment Fund, with dairy co-op and private banking participation, is another good example of innovation in this regard.

In addition, many farmers rely heavily on co-op and merchant credit and I have welcomed initiatives by some of the co-ops in relation to credit facilities for their suppliers.

In relation to the other loan schemes in which my Department is involved:

- The Brexit Loan Scheme, launched in March 2018, provides affordable, flexible working capital to Brexit-impacted businesses, including food businesses,

- The Future Growth Loan Scheme, expected to launch early in 2019, will make competitively priced, long-term investment loans available to eligible Irish businesses, including the primary agriculture, agri-food & seafood sectors.

Each loan scheme is bespoke and it is not possible to estimate the cost of a scheme until it is under development.

In addition to funding sources, compliance with EU State Aid provisions is another key factor in developing any loan scheme. For example, in the case of the ACSLS, the use of EU exceptional aid funding for the scheme meant that loans to livestock farmers were State Aid free, whereas loans to the non-livestock sector were operated under de minimis State Aid limits for primary agriculture.