New EU banking deal to bring much needed funding into agri-food sector – Coveney

The announcement of cooperation between the European Commission and the European Investment Bank in agriculture and rural development has been welcomed by the Minister for Agriculture Simon Coveney.

The Minister made the comments at the EU Council meeting of Agriculture Ministers in Luxembourg.

“This announcement by Commissioner Hogan will assist the EU in bringing much needed funding into the agri-food sector. This is just what we need to develop a globally competitive agriculture industry across the EU.

“My Department and I have been active in exploring new and more competitive sources of funding and will continue to do so in the context of evolving market requirements.”

Minister for Agriculture Simon Coveney pictured at the launch of Farm Safety Fortnight
Minister for Agriculture Simon Coveney pictured at the launch of Farm Safety Fortnight

In relation to accessing finance and credit terms generally, the Minister said he has recently been in contact with the main banks.

I emphasised that this is a critical phase in Ireland’s dairy expansion and that the increased investment and output from production and processing will have significant downstream benefits across the economy generally, including for the banking sector.

“In order to support the on-going development of the dairy sector and to mitigate the current difficulties caused by milk price volatility, I asked them to explore the full range of potential measures that could serve to alleviate the loan repayment burden facing farmers and offer maximum flexibility for dairy farmers in what will be a difficult year ahead,” he said.

The Minister said he believes that it is essential that short term cash flow difficulties are not allowed to undermine prudent investment plans or the longer term competitiveness of their operations.

New EU deal makes enormous sense for Member States – Hogan

According to European Agriculture Commissioner Phil Hogan it makes enormous sense and good financial sense for Member States to get involved with the new initiative.

Speaking following the council meeting he said this is in view of the fact they can use existing funds under the Rural Development Programme to leverage a multiplier of five times that amount in low interest loans which will provide access to credit which is often difficult.

Hogan highlighted areas such as establishing young framers on the land, restructuring the dairy processing sector, investing in forestry and in some green infrastructure in line with agri-environment measures as key sections of the industry Member States could target.

“It also helps to provide co-financing for some EU Member States where because of the financial crisis they had difficulty getting support from their own pillar banks.

“It’s a greater opportunity now to get access to a new source of finance.

Hogan says as detail of the scheme progresses he believes there will be a greater level of interest among EU Member States in perusing the new source of finance.