Macra na Feirme has stressed that credit for young farmers must be in the equation in any upcoming financial instrument consultation.
Commenting on the matter, Macra na Feirme National President, James Healy, said: “Now is the time to seriously consider the introduction of financial instruments on a pilot basis, particularly for young farmers.”
Speaking following a meeting of the Rural Development Monitoring committee he added: “Financial instruments could take the form of loan guarantees and interest subsidies through the Rural Development Programme.”
Indecon Consultants highlighted in a presentation to the Rural Development Monitoring committee that “some market failure exists in the supply of credit to agriculture and fisheries” in their ex-ante-assessment on the use of financial instruments to promote on-farm investment in Ireland.
Indecon estimates a potential funding gap for capital investment in agriculture of €105 million in 2016, rising to nearly €350 million by 2025 if the sector expands in line with Food Wise 2025.
Healy said: “Multiple barriers exist which prevent young farmers from accessing credit to invest on-farm.
Feedback from Macra na Feirme’s young farmers emphasised market failures, such as high interest rates on loans, duration of the loan and the level of security needed to guarantee a loan – [which] all prevent young farmers access to credit.
The plight of young farmers accessing credit is a European phenomenon, highlighted in a DG Agri survey on ‘The Needs of Young Farmers’, Macra added.
Macra na Feirme has also called for solutions through its membership of CEJA (the European Council of Young Farmers) to address access to credit for young farmers.