I am acutely aware that a sustained period of lower commodity prices has caused cash flow difficulties for farmers in several sectors. I have previously indicated that one of my priorities is to support the provision of lower-cost flexible finance. Therefore I was pleased to announce plans for an Agri Cash Flow Support loan fund of €150 million, developed by my Department in partnership with the Strategic Banking Corporation of Ireland (SBCI). This loan fund will support highly flexible loans for up to six years, for amounts up to €150,000, at an interest rate of 2.95%; and available to livestock, tillage and horticulture farmers.
The €150 million loan fund is enabled by €11.1 million in EU funding (under Commission Delegated Regulation (EU) 2016/1613 of 8 September 2016 providing for exceptional adjustment aid to milk producers and farmers in other livestock sectors) and €14 million in national funding provided by my Department; which is combined with balance sheet support from the SBCI and the COSME EU Financial Instrument.
Subject to EU Commission clearance, it is expected that the new fund will be operational as soon as possible in 2017. Further details of the loan fund will be provided in early November, when it is expected that the SBCI will make an open call for lending institutions to participate. Normal lending assessment criteria will apply although the loans will be ‘unsecured’ in nature, thereby facilitating a more straightforward application process.
This loan fund is separate to ongoing work on the potential introduction of ‘Financial Instruments’ under the Common Agriculture Policy. My Department recently procured an ex-ante assessment to examine whether there are any current market failures in the access to finance market in Ireland. The ex-ante assessment is due by the end of the year and is the first step in the consideration of such instruments under the EAFRD Rural Development Programme and the EMFF Seafood Development Operational Programme.
