asked the Minister for Finance if he is aware that the high interest rates being charged by banks and the Agricultural Credit Corporation are placing a heavy strain on the owners of family farms, particularly small farms; and if he has any plans to ease this burden for small dairy and tillage farmers.
Ceisteanna—Questions. Oral Answers. - Bank Interest Rates.
27.
I accept that small farmers in common with other borrowers may find current interest rates rather onerous but, as the Deputy will appreciate, the rates chargeable by the banks and the Agricultural Credit Corporation reflect the high interest rates now prevailing in the international money market. Farmers can, however, get loans at reduced interest rates in certain circumstances. For example, World Bank Loans which are channelled through the ACC and the banks are available at 11¾ per cent. Small farmers can get unsecured loans subject to a maximum of £600 at 10 per cent from the ACC. Finally, under the farm modernisation scheme recently announced by the Minister for Agriculture and Fisheries interest subsidies ranging from 5 per cent to 9 per cent will be available towards approved farm investment. Additional aids to small dairy and tillage farmers would not be feasible.
Could the Minister say how many small farmers qualify for these grants under the new directive?
I would not be in a position to give that information to the Deputy. Every application has to be considered on its merits.
I know, but the question was related to small farmers. He answered the question as to what funds were available to small farmers. Are they available now as a result of the directive?
I have given information to the Deputy to indicate that small farmers can, in fact, receive loans at rates which are better than can be obtained on the ordinary commercial market.
Apart from the special cases being dealt with by the Agricultural Credit Corporation, is it the Minister's knowledge or experience that it is generally the large borrowers who get the lowest interest rates and the small borrowers, who need it most, who are charged the higher rates?
It is very difficult to generalise as far as interest rates are concerned, because there are a variety of factors involved, including the creditworthiness of the applicant, the purpose for which the loan is sought, the duration of the loan and so forth.
The point I am making to the Minister, in the hope that he will be able to do something about it, is that the creditworthiness of the small borrower is worsened by virtue of the fact that the small loan requirement usually involves paying a higher rate of interest.
I think it is worth pointing out that loans for productive farming purposes tend to be issued at a rate lower than those for, let us say, personal loans.
That is the Agricultural Credit Corporation.
Even from the banks.
Can the Minister say if the farm modernisation scheme is in operation?
The Deputy would want to address that question to the Minister for Agriculture and Fisheries.
It has been said here by the Minister for Finance that the small farmers could apply to be included in the farm modernisation scheme, whereas everybody in the country knows that the Government have not come to any terms with the agricultural instructors and that the scheme is worth nothing. That is not a factual reply for any Minister to give in the House.
That is not so.