Could a new ‘affordable’ credit scheme be on the way?

The opening of a public consultation on the possible introduction of a pilot ‘Financial Instrument’ under the Rural Development Programme (RDP) was announced by the Minister for Agriculture, Food and the Marine, Michael Creed, earlier today.

The Financial Instrument discussions will also focus on the European Maritime and Fisheries Fund (EMFF), as well as the RDP.

The consultation – according to the Department of Agriculture – is based on a detailed evaluation by Indecon Consultants, who were commissioned by the department to assess the feasibility of such instruments.

Announcing the move, Minister Creed said: “Access to affordable credit for our agri-food sector is a key priority of mine and I am in regular contact with the chief executives of the main banks.

“I have reminded them of the importance of flexible credit and cashflow for the sector, particularly in light of ongoing challenges presented by Brexit.

“The take-up of the €150 million agri-cashflow scheme developed by my department in cooperation with the SBCI (Strategic Banking Corporation of Ireland) demonstrates the importance of lower cost and more flexible finance as a response to competitive pressures.

Financial instruments are an option under the RDP and the EMFF Operational Programme, where an identified funding gap exists for operators in those sectors.

“The assessment by Indecon has found that there may be a case for a Financial Instrument to complement the investment schemes available to farmers under the operational programmes.”

Elaborating, the minister added: “However there are implications for progressing with such an instrument, notably that take-up of such a loan would lead to a consequential reduction for the recipient farmer or SME (Small/Medium sized Enterprises) in their RDP or EMFF investment grant.

“In addition, it would also mean diverting funds from existing RDP and EMFF allocations.

Given all of these considerations, I am keen to hear the views of stakeholders before deciding on next steps.

The consultation paper launched today is particularly aimed at those farmers who may wish to avail of grants under TAMS II, and seafood enterprises who wish to access grants under the EMFF OP for aquaculture and seafood processing.

However, everyone with an interest – including representative bodies and financial institutions – is welcome to participate, according to the department. The closing date for submissions is Friday, October 13.

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