Opinion: Low-interest loan in Budget a sign of things to come to tackle volatility
Published 19/10/2016 | 13:00
While most farm organisations were reasonably satisfied with the Budget, the ICMSA will feel that their concerns were ignored.
They wanted the €11m in EU crisis funding to be ring-fenced for the dairy sector. They also wanted it to be a straight-forward payment, with no caveats, terms or conditions.
The case for keeping all the money for the dairy sector was a weak one. Dairy incomes may be down 30pc this year, but they are still multiples of the equivalents in grain, beef or sheep.
Now that milk prices are recovering, the case for keeping it for dairy only is weaker still.
The argument that crisis funding from Europe should not be tied into schemes that require farmers to borrow money is a more interesting one.
Proponents of the scheme will argue that this was designed for farmers with unpaid bills in the form of expensive merchant credit. In these cases, a scheme that provides money to farmers at a fraction of the rate (3pc vs 12pc) is a godsend.
But you could argue that this scheme will just entice more farmers to make themselves further indebted.
Like it or not, the scheme may well be a harbinger of a distinct change in direction for how the CAP is spent in the future.