To be administered by the Strategic Banking Corporation of Ireland, the loans will be available early in 2017.
Agriculture Minister, Michael Creed, has urged farmers who want to avail of the loans to plan ahead as the loans will be issued on a first-come, first-served basis.
IFA president Joe Healy welcomed the allocation of low-cost credit, increased funding for farm schemes, the reversal of cuts to Farm Assist and the income volatility measure.
He said all of these measures were the focus of IFA lobbying.
Mr Healy acknowledged the €107m boost in funding of farm schemes under the Rural Development Programme, notably the €69m increase for GLAS to €211m for 50,000 farmers and the €25m sheep welfare scheme.
“The Government must build on these schemes to reach the €250m for GLAS set out in the RDP and continue to improve suckler and sheep supports,” he said.
While he criticised the decision not to start the restoration of ANC funding in 2017 was disappointing, given the very difficult income situation this year, he said the new flexibility under income averaging, to be introduced for the current year, reflects the impact of price volatility and will help farmers to manage the very difficult cashflow situation on farms.
ICMSA president John Comer said the budget was “steady and solid” but criticised the diversion of the EU Crisis Fund into low interest loans instead of a flat payment to dairy farmers.
He said the changes to the USC and the extension of earned-income credits for self-employed were general benefits though he pointed out that taxation system still has an in-built bias against farmers and self-employed in terms of individual credit.
He also welcomed the extension of the capital gains tax Farm Restructuring Scheme to 2019, the increase in the capital acquisitions tax-free thresholds and the extension of capital allowances for energy efficient equipment to sole traders.
ICOS president, Martin Keane, said: “I welcome the adoption of a tax adjustment measure to allow the deferral of tax bills for farmers in income averaging in order to alleviate cash-flow concerns in a difficult year.
“I acknowledge the increase in the earned income credit to €950, the increase in the farmer’s flat rate addition from 5.2% to 5.4% and the low cost credit available to farmers.”
He also welcomed the inclusion of the ICOS volatility proposal to allow farmers to voluntarily defer 5% of their income in any given year, to be drawn down within five years, but said the measure should have been finalised in time for this year’s budget.