Credit squeeze slows €1bn rural scheme

CREDIT difficulties are holding up progress in the LEADER rural development scheme, for which funding of more than €425 million is allocated for the six years to 2013.

“If projects are developed, matching funding is available from the State and the EU, but it is proving difficult to secure matching funding from the banks and the financial institutions,” said Community, Equality and Gaeltacht Affairs Minister Pat Carey last week.

“There are smaller institutions that have an ethical base that are working with some of the LEADER companies to provide co-funding, and I will meet some of them in the next two weeks to see if we can get more engagement from them. I wish the commercial sector and the covered institutions would be more forthcoming but there are difficulties at present.”

Some 36 local action groups throughout the country are implementing LEADER elements at local level.

When private investment is added to European and national money, rural Ireland is on course for an injection of nearly €1bn to develop rural enterprise and quality of life.

The slow rate of LEADER expenditure has been noted by IFA, with only about 6.5% of the €425m funding allocated in the first 3½ years of the seven-year programme.

IFA rural development chairman Tom Turley called for increased LEADER grant aid for farm diversification and other projects, to stimulate uptake of funding.

“The Department has confirmed to IFA that they now plan to increase grant aid from 50% to 70% for individual projects. In the case of community projects, they propose to increase the grant aid from 75% to 90%. The main expenditure to date has been on administration, which is not delivering economic activity and job creation in rural areas.” Mr Turley said very little of the €16m allocated for diversification into non-agricultural activities has been spent. This was related to the low income position of farmers and difficulties in securing credit, but increasing the grant aid would help, and he called for this proposal to go to the EU Commission.

He also called on Mr Carey to tackle red tape and bureaucracy which – according to IFA – is killing many LEADER initiatives.


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