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Dáil Éireann debate -
Tuesday, 18 Nov 1986

Vol. 369 No. 11

Ceisteanna—Questions. Oral Answers. - Euro Loan Scheme.


asked the Minister for Agriculture if glasshouse owners will be eligible to avail of the Euro Loan scheme where they find themselves in financial trouble.


asked the Minister for Agriculture if he will consider broadening the conditions to qualify for the Euro Loan as the present conditions do nothing to alleviate the serious financial problems facing farming; and if he will make a statment on the matter.


asked the Minister for Agriculture if he is aware of the severe financial hardship facing many farmers at this time; and if he will outline his plans for the rejuvenation of the agricultural industry.


asked the Minister for Agriculture if he will take steps to ensure that restrictions being placed by the Government on the availability of the Euro finance to farmers are relaxed to enable them to gain maximum benefit and assist them in their present difficulties.


asked the Minister for Agriculture if he will state in regard to EC low interest loans to farmers where applications are to be made; and if there are any special conditions attached to such loans.


asked the Minister for Agriculture whether in view of the difficulties that have arisen with the EC with regard to the production of milk, beef and cereals, if he has immediate plans to encourage alternative farm enterprises; and, if so, the reason there is not greater emphasis on promotion of these alternative enterprises.


asked the Minister for Agriculture if he will consider amending the regulations relating to the Euro-currency loan scheme whereby for particular counties, such as County Wexford, the weather condition would be dropped as their financial hardship is not necessarily due to weather; if he will also ensure that any particular applicant is issued with the full guidelines which were sent to the banks so that there cannot be any subsequent misunderstandings with the lending institutions and the applicant; if he will consider dropping the condition where eligible applicants are limited to approvals from one lending institution only in view of the high level of split borrowings between different lending institutions with individual farmers; the level of loans which have been issued to date under the scheme; and in the event of the full amount being utilised, if he has any plans to increase the amount available under the scheme.

I propose to take Questions Nos. 6, 11, 16, 20, 22, 32 and 158 together.

Under the exchange rate guarantee scheme the Government have provided £200 million in EMS currencies for lending to full time farmers and private peat producers who are in severe financial difficulty as a result of adverse weather conditions in 1985 and 1986. The loans are being made available at an exceptional interest rate of around 5½ per cent for working capital purposes and for restructuring the existing debt of farmers who are in severe financial difficulties directly as a result of the adverse weather conditions in 1985 and 1986. It is understood that £80 million has been credited to farmers' accounts to date and the rate of draw downs is in the region of £15 million per week. The scheme is operated by the four associated banks and the ACC. Applications may be made to any branch office of these institutions.

Of the total funds available, a minimum of £65 million has been reserved for new working capital requirements of those farmers covered by the scheme initiated on 1 June last, i.e., dairy farmers with quotas of less than 25,000 gallons, pig producers, winter beef producers and cereal growers, as well as for other categories of farmers who are in severe financial difficulties because of weather conditions. In the case of greatest hardship, loans of up to £50,000 will be granted and there will normally be a qualifying minimum debt of £4,000. It is a matter for individual applicants to establish their eligibility for benefit with the lending institution concerned, which can provide them with the full details of the scheme.

A second exchange rate guarantee scheme of loans of up to £35 million in EMS currencies is being provided by the Government for on-lending to farmers for new development purposes. The purposes of this scheme include development of non-surplus products such as sheep, protein crops and vegetables; farming activities which, although non land using, can supplement income and provide employment for farm families; diversification into "minority" activities, e.g., horses — hunters and ponies — or deer farming.

The terms and conditions of these schemes have been drawn up so as to ensure that the funds are allocated to those most in need of low interest capital in order to maintain their contribution to agricultural output and income. The question of any amendments to these terms and conditions or of any change in the amount available will be considered in the light of experience in the operation of these schemes.

Will glasshouse growers who have had to endure very steep energy costs over the past six or seven years be eligible for aid under this loan scheme?

I inquired specifically about that point. They would have difficulty in proving that their income is down by one third because they had to buy extra oil. However, the matter has not been ruled out.

Does the Minister agree that if this narrow category are excluded from the scheme they will be severely discriminated against, bearing in mind the crisis in the glasshouse industry? They should have been one of the first categories to be included in the scheme.

It appears that they are having difficulties and I will be prepared to look at the matter sympathetically.

Does the Minister agree that, after two of the worst years in living memory, a subsidised loan is of little use to agriculture? The sum £200 million represents about 13 per cent of farmers' borrowings from the bank or the ACC. It is an insult to the farmers. Would the Minister consider extending the scheme for at least five years to give hope to farmers and to help them to get off their knees?

I do not agree that it is an insult to farmers as it has been very much welcomed by farmers with whom I have been in contact. Indeed, they are availing of the scheme on a daily basis and it has proved to be an enormous help to them, not merely to pay off some of their debts but to make provision for the coming year.

The Minister said this money could be used for people who wanted to diversify. Can he give instances of where people could use the money for the purposes he outlined?

I gave a few instances in my reply, for example, sheep farming and producing anything which basically is not in over supply.

What is that?

Deputy Leonard.

A Cheann Comhairle——

Deputy Noonan was trying to get in.

I did not want a vacuum to develop.

(Limerick West): I do not accept what the Minister has stated that there is an uptake in this particular loan. The uptake is very slow because of the restrictions which are imposed. Would the Minister, first of all, increase the amount of money available and, secondly, would he modify the conditions under which these loans are made available? The Minister must also realise——

A question, Deputy.

(Limerick West): ——that these loans are only available for a short period of time. The scheme will end in December 1987. Would the Minister consider extending the time to at least five years in order to assist farmers who are in a dire financial position?

I am sure the Deputy is aware that there is also——

(Limerick West): Is the Minister?

——the £35 million exchange rate quarantee scheme which is a four year scheme. Admittedly, the rate of interest is around 9 per cent but it is still a very good loan.

(Limerick West): We are talking about the other one.

On the take-up of the loan, on the contrary it is a dramatically——

(Limerick West): Would the Minister consider modifying the scheme so that there would be a greater uptake by farmers?

In my reply I said that we could look at it.

(Limerick West): Is the Minister going to do it or not? Now is the time. Time is not with us.

At present it is being devoured by people who have had problems as a result of the adverse weather. Basically, that is what we are talking about.

(Limerick West): Can the Minister see modifications in the scheme and how soon? When will a decision be made to modify this scheme so that there will be a greater uptake by the farmers who need it? There is no point in considering it.

There is a monitoring group consisting of the Department of Agriculture, the main farming organisations, the IFA, ICMSA and Macra na Feirme, the associated banks and the ACC to monitor the operation of the scheme. They are meeting on a regular basis.

I am calling Deputy Wilson.

Is the Minister satisfied that the associated banks are not foot dragging in this matter? Is he aware that there have been plenty of complaints from individual farmers that local representatives of the associated banks are not facilitating or helping them to the extent that they should?

I am not so aware. From my experience with local banks, and I have to be local on this myself, the scheme is working quite well.

That is not the evidence.

Is the Minister aware that officers of his Department are at present pursuing farmers for a refund of the interest subsidy under the severe financial difficulty scheme and would he give an assurance that the same will not happen under this scheme?

That is not happening under this scheme.

Would the Minister instruct the officers in his Department to withdraw from hounding farmers until a repayment of the interest subsidy is made?

That comes up at a later stage under a different question.

(Limerick West): A Cheann Comhairle——

I have allowed everybody——

(Limerick West): A number of questions have been taken together.

I allowed every Deputy who had a question down——

(Limerick West): Can I ask a further supplementary question?

I am allowing two more questions. I will allow one of them to Deputy Noonan and the other to Deputy Seán Byrne.

(Limerick West): When was the last occasion the Minister was in consultation with the review body and how often do consultations take place between the Minister's Department and the review body?

The most recent meeting of the review body was on 5 November.

Deputy Seán Byrne, and that is the end of it.

Would the Minister agree that the reduction in the interest rate, about 8 per cent of the £200 million, is only a relief of £16 million on the debt of farmers today and would he please reconsider the scheme? Is the Minister suggesting that the farmer should not have a house to live in? If a farmer built a house in recent years he is disqualified under that scheme. That is totally wrong.

The Deputy cannot make a speech.

Does the Minister want farmers living in mobile homes?

The Minister has no answer.

It is a good scheme.

It is a national farce. It is an insult to farmers.

If it were that farcical, they would not be availing of it.

Ceist a seacht, Deputy Noel Treacy.

I would like to ask the Minister——

I am sorry, I have gone on to the next question.