Minister for Agriculture Simon Coveney is considering the inclusion of financial instruments (FIs) in Ireland’s Rural Development Programme (RDP).

“The funding for any such FIs would have to draw on Ireland’s existing RDP allocation of European Agricultural Fund for Rural Development funding as well as national Exchequer funding,” said Coveney, in response to a parliamentary question from Clare TD Joe Carey. “So far, seven programmes from five member states have implemented a FI for the current programme period.”

In order to include a FI as a measure in an RDP there are three key steps:

  • Ex-ante assessment – under EU regulations, this must be done and can take three months to a year to complete.
  • Investment strategy – an agreement must be reached by the Department and any other stakeholders/financial institutions on a clear investment strategy that is developed from the gaps identified in step 1.
  • New measure – a description would have to be drafted and inserted into the RDP by way of an amendment.

    • Under current legislation, this is the only way to add FIs to the RDP. However, the Commission has proposed a change to the regulations in order to allow FIs into the RDP as a separate amendment.

    “While this would allow greater flexibility in terms of inserting an FI measure into the RDP, the time frame from assessment to Commission approval means that the whole process could still take a year or more,” said Minister Coveney. “In the interim, my Department has been exploring new and more competitive sources of funding for Irish agriculture and will continue to do so in the context of evolving market requirements.”

    Of the almost €45m in loans approved and drawn down through the agriculture investment loans provided by Strategic Banking Corporation of Ireland, a third has been accessed by the agricultural sector, including farmers, between March and the end of June 2015.

    Those loans have lower interest rates compared with those currently on the market, with amounts of up to €5m and increased repayment flexibility.

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