Wednesday, 4 December 2019

Questions (183)

Jackie Cahill

Question:

183. Deputy Jackie Cahill asked the Minister for Agriculture, Food and the Marine the number of farmers and young farmers in particular who have applied for a loan from the €1 billion loan scheme announced by the European Commissioner for Trade on 19 April 2019; the value of funds drawn down; the value of funds awaiting drawdown following the loan offer; and if he will make a statement on the matter. [50505/19]

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Written answers (Question to Agriculture)

The programme referred to the Deputy allows Member States and financial institutions operating across the EU to engage with the Commission and the EIB to develop schemes tailored to their own individual needs and requirements.

The programme will be managed at Member State level by banks and leasing companies operating across the EU. Therefore, the details requested will only be known following engagements by these financial institutions with the Commission and the EIB.

Ireland, through my Department and the Department of Business, Enterprise and Innovation, in partnership with the Department of Finance and the Strategic Banking Corporation of Ireland (SBCI) has already engaged with the EIB & the European Investment Fund (EIF) to develop the Future Growth Loan Scheme. It is being delivered through participating finance providers nationally and will make up to €300 million of investment loans available to eligible Irish businesses, including farmers and the agrifood & seafood sectors.

The loans are competitively priced (an initial maximum loan interest rate of 4.5% for loans less than €250,000), will be for terms of 8-10 years and will support strategic long-term investment in a post-Brexit environment. A minimum loan amount of €100,000 applies up to a maximum of €3,000,000 per applicant. However, considering the needs of Irish farmers, I have negotiated a specific minimum of €50,000 for them.

This is a financial product that was previously unavailable in Ireland, hence the involvement of the various public bodies to bring it to market. The unique characteristic of the Scheme is that loans up to €500,000 are unsecured making it a viable source of finance for young and new entrant farmers, especially the cohort who do not have high levels of security. It will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution.

Food companies have identified long-term investment finance of up to ten years as a critical need which is currently unavailable in Ireland. I am happy that the Government have been able to deliver this product and its effects will be felt all along the food production chain from primary producer to processor.

The Scheme has been open for loan eligibility applications through the SBCI website since 17th April and there has been a good level of demand from farmers. In total 2,017 loans are approved, of which 725 are farmers, and 236 are food companies. A total of 686 loans to the value of €147.4m have been sanctioned. Of these, 320 loans are to farmers with a total sanction amount of €38.2m and 64 are food companies with a total sanction amount of €22m.