asked the Minister for Finance whether the same terms to cover short and medium term borrowing for the purpose of encouraging agricultural production are now available from both the Agricultural Credit Corporation and the commercial banks; and, if not, if he will make a statement clarifying the position.
Ceisteanna—Questions. Oral Answers. - Borrowing for Agricultural Production.
20.
I assume that in referring to terms the Deputy has in mind principally the rate of interest applicable to loans. As announced by the banks, loans made by them will be subject to normal bank interest rates, the present rate being 5¾% per annum. The rate of 5¾% per annum is also applicable to loans made available by the banks with the guarantee of the Agricultural Credit Corporation, except that in the special case of short term borrowing for the purchase of fertilisers or ground limestone the rate will be 5% as heretofore.
The interest rate applicable to all loans made direct to farmers by the Agricultural Credit Corporation is now also 5¾%. This is indicated in the separate public statement made by the Corporation.
Terms other than the interest rate will vary according to the type of loan. The Agricultural Credit Corporation have made it clear that formalities and security conditions will not be onerous and the banks have also announced that security conditions will be reasonable in each case.
Would the Minister tell me what special facilities with regard to medium term credit are being made available by the Agricultural Credit Corporation over and above what are already available from the banks?
The Agricultural Credit Corporation have undertaken to consider applications for short term, medium or long term loans, as they always have done. The fact that the banks are going into business in a more comprehensive way and the fact that the Agricultural Credit Corporation is prepared to guarantee loans for farmers does not in any way interfere with the business the Agricultural Credit Corporation are carrying on. They will carry on as before.
Is it not a fact that both the banks' and the Agricultural Credit Corporation's rate for short and medium-term loans is five and three-quarter per cent.? Would the Minister say now whether it is more attractive for farmers to apply to the Agricultural Credit Corporation rather than to the banks? Would it not appear that they are overlapping? What I want made clear in connection with the small farmer is: to which is it advisable for him now to make application for short or medium-term credit when the farmer concerned has not previously been accustomed to doing business with a banking concern?
I think, from the point of view of getting his application considered fairly quickly, he had better go to the commercial bank. The commercial bank, if it does not undertake the loan, will pass him on to the Agricultural Credit Corporation.
The best thing would be to apply to both.
The farmer could apply to both, if he wishes.