Farmers urged to opt for loan from EU fund
Farmers, agri-business and rural enterprises are being urged to consider opting for low interest loans from a multi-million euro EU-supported fund for rural development.
EU Agriculture Commissioner Phil Hogan said he hoped the Government would promote the new credit lines from the European Investment Bank (EIB) and, if fully utilised, it would deliver great benefits for the country. It is expected the long-term loans would have interest rates of around 3pc.
It comes at a time when direct EU payments to some farmers under the reform of the Common Agricultural Policy (CAP) are falling and amid cuts to the LEADER rural development programme.
"Following the recent reform of the CAP, farmers will be far more market-orientated in their production decisions with the EU direct payment providing additional security of revenues in the context of market volatility, unpredictable weather and variable input costs," said Mr Hogan at a European conference on the financial instruments at Dublin's Convention Centre.
He said the measures were not to "undermine" the impact of the current grant-based approach, but would offer additional access to long-term, 80pc guaranteed, lower interest loans for farmers, agricultural businesses and rural enterprises. Mr Hogan said financial instruments could be used as a very important "tool for boosting" EU agriculture.
Taoiseach Enda Kenny said the priority was to set up a sustainable model around the use of the financial institutes to access loans.
"The newly established Strategic Banking Corporation of Ireland will play an important role in delivering the EIB risk financing instruments that are targeted in particular at small and medium enterprises," he said.