Earlier this year the European Commission (EC) and the European Investment Bank (EIB) presented a model guarantee instrument which aimed to help ease access to finance for farmers and other rural businesses.
The Minister for Agriculture Simon Coveney said recently that he is still considering whether to include Financial Instruments (FIs) in Ireland’s Rural Development Programme.
He said the funding for any such FIs would have to draw on Ireland’s existing RDP allocation of European Agricultural Fund for Rural Development funding as well as National Exchequer funding.
So far 7 Programmes from 5 Member States have implemented a FI for the current programme period. In order to include a FI as a measure in a RDP an Ex ante assessment is required by EU regulation. This assessment can take between 3 months to a year to complete.
According to the Minister, once this is done, an agreement must be reached between the Department of Agriculture and any other potential stakeholders/financial institutions on a clear investment strategy that is developed from the gaps, if any, identified in the ex ante assessment.
Following this, the Minister said a new measure description would have to be drafted and inserted into the RDP by way of an amendment.
FIs can only be introduced to the RDP this way and currently only one amendment is allowed per year; this could mean that the FI assessment would not be completed in time for Ireland’s next amendment in 2016.
However, the Minister said the European Commission have proposed a change to the Regulation in order to allow Member States to lodge a separate amendment to the RDP in respect of Financial Instruments and this will be decided on in the near future.
While this would allow greater flexibility in terms of inserting an FI measure into the RDP, the timeframe from assessment to Commission approval means that the whole process could still take a year or more.