I am conscious that the prolonged winter will have put some individual farmers under pressure in terms of cash flow. In recognition of this, I met with the CEOs of the main banks and discussed the current cash flow and liquidity position of the primary sector. I emphasised to them that they should recognise the temporary and exceptional nature of the current situation and that they should be flexible and put in place measures to support their customers. They indicated to me that there are no signs that there is a liquidity issue across the sector as a whole, while acknowledging that there may be pressures in individual cases. They assured me that they will provide supports such as extended overdraft facilities and term loans to their customers and asked that those in difficulty should contact them as soon as possible.
One of my priorities is to improve access to finance for the agri-food sector. Food Wise 2025 identifies competiveness as a key theme and includes a recommendation that stakeholders work to “improve access to finance for agriculture, forestry and seafood producers and agri-food companies”.
Last year I introduced the Agriculture Cashflow Support Loan Scheme, developed in cooperation with the Strategic Banking Corporation of Ireland (SBCI). It provided low-cost, flexible working capital finance to farmers to address the impact of the change in the sterling exchange rate following the Brexit vote and lower commodity prices in some agriculture sectors in 2016/17. I was pleased at the very positive reaction by farmers to the Scheme, which was fully subscribed. The provisional drawdown totals are that there were 4,246 applications totalling €144,903,656, with an average loan size of €34,127 and an average loan period of 41 months.
I launched a new “Brexit Loan Scheme” on the 28th March in cooperation with the Minister for Business, Enterprise and Innovation and the Minister for Finance, which will provide up to €300 million of affordable, flexible working capital finance to Irish businesses that are either currently impacted by Brexit or who will be in the future. The Scheme will be available to SMEs and mid-cap businesses. Given their unique exposure to the UK market, my Department’s funding ensures that at least 40% of the fund will be available to food businesses.
I announced in Budget 2018 that my Department is considering the development of potential Brexit response loan schemes for farmers, fishermen and for longer-term capital financing for food businesses. These schemes are developed and delivered in cooperation with the SBCI and take time to develop and operationalise. Consideration and discussions are ongoing in this regard and I will announce further details as they become available.