The previous low-cost loan scheme introduced in 2016 has acted as a ‘catalyst’ for better cash-flow products in the agricultural sector, according to Minister for Agriculture, Food and the Marine Michael Creed.
In addition, higher advance payments and credit facilities put in place by co-operatives have eased pressures on cash flow for farmers, he said.
Cash flow
Minister Creed was responding to parliamentary question put forward by Fianna Fail spokesperson for agriculture Charlie McConalogue.
Deputy McConalogue asked the minister reason why no working capital loan scheme was announced in Budget 2019 for farmers expderiencing cash-flow difficulties.
Responding to the queries, the minister said: “The agreement I secured from Commissioner Hogan to make higher advance payments this autumn will result in a very substantial €260 million in additional cash flow for farmers in 2018.”
“I have had ongoing engagement with the banks on the cash-flow pressures arising from the effects of the weather on grazing and fodder stocks.
“I am pleased to see that this engagement and the delivery of last year’s Agriculture Cash Flow Loan Scheme have acted as a catalyst to encourage financial institutions to improve and develop new products for the sector.”
- A recently-announced initiative by one of the main banks which mirrors the scheme in offering a discounted interest rate with extended and flexible repayment terms;
- All three main banks have dedicated offerings in response to the current situation;
- Co-ops have introduced recent initiatives on credit facilities for their suppliers.
A spending review of the Agriculture Cash Flow Loan Scheme, published with Budget 2019, concluded that this was one of the main outcomes of the initiative, Minister Creed said.
“In the context of these new and improved supports in this area, the focus of the Government has been to address market gaps, the most critical of which has been identified as unsecured longer-term investment finance.”
Future Growth Loan Scheme
Minister Creed noted that, when announcing Budget 2019, Minister for Finance and Public Expenditure and Reform Paschal Donohoe formally announced progress in relation to the development of the ‘Future Growth Loan Scheme’ for SMEs, including the primary agriculture and seafood sectors.
“As I announced on budget day, this is the scheme for which I had provided €25 million in funding in 2018.
This is a key Government Brexit response that has been under consideration and development throughout 2018.
“Further details will be provided in the coming months. The scheme is expected to be in place in early 2019 and will run for three years from its launch date,” the minister said.