Coveney says EIB funding would force down interest rate

Agriculture Minister Simon Coveney has held out hope of cheaper bank loans for farmers, through European Investment Bank funding.

Earlier this year, EU Commissioner for Agriculture and Food, Phil Hogan outlined plans to roll out a guarantee fund with EIB backing, which offers security for up to 80% of the value of loans to be provided by banks.

These EIB backed loans will be part of the Rural Development Programmes in each Member State and will finance investments in the areas of farm performance, processing, marketing and business start-ups.

Mr Coveney said, “People who are using grant aid to upgrade their farmyards, for example, should be able to borrow the balance from competitive funds that can be put in place to do that.

“If we can show there is market failure in certain areas, in other words, that farmers or the agricultural industry cannot get competitive finance in the normal way, or we can show that there is the potential for added value to an investment in a certain area, and if that is consistent with EU policy, which is always a test for EIB investment, we should be able to draw down money to do that.

“Such money would probably come through the existing banking system, as is the case with the SBCI, or perhaps through new financial models for farmers. That is yet to be put in place.”

He said interest rates charged to farmers in Ireland are not as competitive as they should be.

“If we could get EIB funding into Ireland, we may be able to force this down through competition, which is the most likely way to get a significant reaction.”

ICOS, the co-operatives organisation, is also putting its weight behind the bid for cheaper loans.

A spokesman said, “ICOS is acutely aware of the critical importance of continued capital investment at farm and processing level. We continue to engage at EU Commission and Government level to ensure the swift implementation of the EIB loan facility.

“While some technical issues still need to be finalised between the Commission and EIB, Commissioner Hogan remains hopeful that the multi-million loan package will be finalised in the coming months.”

n Meanwhile, Mr Coveney said has said that of the almost €45 million in loans approved and drawn down by small and medium enterprises between March and the end of June from the Strategic Banking Corporation of Ireland, a third have been accessed by the agricultural sector.

SBCI, which has the EIB as one of its funding partners, recently announced a new agriculture investment loans product at lower interest rates than are currently on the market, loan amounts of up to é5 million, and increased repayment flexibility.

These loans are available through the existing banking system.


Lifestyle

Beauty experimentation has to start somewhere, and for many of us it’s with the same high street products and trendy looks.From the 70s to the 00s, these were the beauty products that defined your teenage years

Bestselling novelist Jojo Moyes talks about the books she grew up with, what she’s reading now, and the literature gaps she wants to fill.Jojo Moyes: My life in books

This week's food news with Joe McNammee.The Menu: Quick nibbles; International Women's Day; The People's Choice

With spring around the corner, it’s the perfect time to treat your home to a detox. Gabrielle Fagan taps up the Topology design gurus for tips.How to make your home calmer and less cluttered in 7 simple steps

More From The Irish Examiner