Milk reduction scheme payments to be issued to dairy farmers this week
Payments under the EU Voluntary Supply Management Scheme, totalling €6.5m, will start to issue today to dairy farmers across the country.
The Minister for Agriculture, Food and the Marine, Michael Creed, announced that payments will start to run this week in respect of Phase I of the scheme.
Introduced by the EU Commission last year, the scheme was a short-term market stabilisation mechanism.
It was introduced as part of a range of tools to mitigate price volatility in the dairy sector.
I am pleased to announce that my Department has commenced payments under Phase 1 of this scheme which will see almost €6.5m paid out to 3,500 Irish dairy farmers, who applied for aid to reduce their production in the last quarter of 2016.
“This will provide a significant cashflow boost to dairy farmers at an important time of year.
“I would like to acknowledge the initiative of Commissioner Hogan in coming forward with the scheme as part of the response to dairy market volatility last year,” Minister Creed said.
Global dairy markets have improved considerably in recent months and returns to Irish producers have improved considerably compared to 2016, he added.
There is no room for complacency, of course, and vigilance is required to ensure that the effects of market volatility are mitigated as soon as possible.
“There are other challenges for our dairy sector of course, not least the potential impacts of Brexit.
“Broadening our reach to other markets is the best response to this issue and I look forward to leading a number of trade missions this year; to further highlight the world-class dairy products which Ireland offers the world.”
Agriculture Cashflow Support Loan Scheme
The Voluntary Supply Management Scheme was a part of a wider suite of volatility mitigation support measures brought forward by the EU Commission, he added.
“The €11m allocated to Ireland from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’ was used in an innovative way, together with €14m in national funding, to contribute to the Agriculture Cashflow Support Loan Scheme,” the Minister said.
“This scheme, developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI), has made €150m in loans available to farmers in all sectors, at interest rates of 2.95%.
“This scheme provides farmers with a low-cost, flexible source of working capital, which will allow them to pay down more expensive forms of short-term debt,” he said.
The favourable reaction by farmers to the scheme has proved that significant demand exists for low-cost flexible finance, he added.
I hope that the commercial banks will respond positively to this demand, by reducing interest rates and providing more flexible terms for cash-flow loans in the future.
“I plan to meet with the Chief Executives of the banks shortly to discuss this and other issues relating access to finance in the agri-food sector,” Minister Creed said.