Key figures from our European neighbours indicate that the new Agriculture Cashflow Support Loan Scheme will contribute to levelling the playing field between Irish farmers and similar borrowers elsewhere.

In the UK, the latest Bank of England statistics show that the average interest rate for short-term unsecured loans to unincorporated businesses (such as farmers operating as sole traders) is 6.2%. Rates reported to the Irish Farmers Journal in Northern Ireland for unsecured agri loans range between 5% and 6%. More generally, loans to British small businesses have average interest rates of 3%.

European Central Bank data show that the average interest rate across all types of secured and unsecured business loans under €250,000 in the euro area is 2.6%, compared with a record 6.4% in Ireland. In November, taking out this type of loan here became more expensive than in Greece. Farmers in the agricultural powerhouses of Germany and Italy pay around the European average. Rates are higher in the Netherlands (3.4%) and lowest in Austria (1.8%).

In the EU’s largest agricultural producer, France, the average interest rate on small business loans is 1.9%. Following the disaster harvest there last summer, Crédit Agricole, the largest lender to French agriculture, made a €5bn fund available for cashflow loans to farmers at a maximum rate of 1.5%.

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Low-cost loans bring Irish farmers in line with European rates

The Agriculture Cashflow Support Loan Scheme allows farmers to borrow up to €150,000 at an interest rate of 2.95%. How does this compare with business interest rates in other countries?