Dáil Éireann Debate, Tuesday - 3 October 2017
66. Deputy Martin Heydon asked the Minister for Agriculture, Food and the Marine his plans for another phase of low-cost loans for farmers in view of the success of the previous scheme; and if he will make a statement on the matter. [41616/17]
View answerOne 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 draw-downs 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 three years or more. The participating banks have advised that all of the remaining €150 million 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 agrifood 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.
