This programme would see farmers benefiting from State-guaranteed funding and investment with interest rates as low as 1.5%, the Clare Labour TD said.
EU Agriculture Commissioner Phil Hogan announced the scheme in June 2015, McNamara said, stating that “once this security is available, someone with a business idea is much more likely to find that the door of the bank opens when he goes knocking.”
McNamara, who is a farmer himself, highlighted in the Dáil last week that the implementation of the scheme had come to a standstill since Commissioner Hogan had announced it more than six months ago.
He argued that the current situation is unsustainable, leaving farmers with the options of either investing in their own farms at cripplingly high interest rates or subscribing to the TAMS II grant scheme.
The latter scheme provides small to medium grant aid towards capital investment in farms but in recent times, and with the recent calving season, has encountered enormous delays and is currently oversubscribed, he said.
High interest rates
Despite a thriving agriculture industry that has seen 61,000 jobs created since 2013, McNamara highlighted that farmers are still burdened with interest rates of 4.5% where the loan is secured, and 6.5% where it is unsecured.
“People obviously are able to leverage more money when interest rates are lower. They are able to borrow more, or at least the cost of borrowing is lower for their businesses.
“Second, banks are prepared to lend more where a guarantee scheme is in place and I note this is a guarantee scheme. However, it is not being availed of in Ireland and I wish to know why not,” he said in the Dáil.
Deputy Ann Phelan, Minister of State at the Department of Agriculture, Food and Marine, responded to McNamara’s questioning by explaining that the Government had yet to examine the use of financial instruments such as the low interest loans put forward by the scheme.
“I’d bet my farm on it”
It was acknowledged by Phelan that the low-interest loans as part of the RDP scheme are in existence, but these loans cannot come into operation until the banks in conjunction with the Government identify the relevant investment gap.
McNamara said he would bet his farm on the unlikelihood of the banks advising the Government to provide low-interest loans of 1.5%, when they are currently providing loans at significantly higher interest rates. He argued that the government are essentially giving the banks a veto in the agriculture industry which is holding farmers back.
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Department considering providing farm finance under the RDP
This programme would see farmers benefiting from State-guaranteed funding and investment with interest rates as low as 1.5%, the Clare Labour TD said.
EU Agriculture Commissioner Phil Hogan announced the scheme in June 2015, McNamara said, stating that “once this security is available, someone with a business idea is much more likely to find that the door of the bank opens when he goes knocking.”
McNamara, who is a farmer himself, highlighted in the Dáil last week that the implementation of the scheme had come to a standstill since Commissioner Hogan had announced it more than six months ago.
He argued that the current situation is unsustainable, leaving farmers with the options of either investing in their own farms at cripplingly high interest rates or subscribing to the TAMS II grant scheme.
The latter scheme provides small to medium grant aid towards capital investment in farms but in recent times, and with the recent calving season, has encountered enormous delays and is currently oversubscribed, he said.
High interest rates
Despite a thriving agriculture industry that has seen 61,000 jobs created since 2013, McNamara highlighted that farmers are still burdened with interest rates of 4.5% where the loan is secured, and 6.5% where it is unsecured.
“People obviously are able to leverage more money when interest rates are lower. They are able to borrow more, or at least the cost of borrowing is lower for their businesses.
“Second, banks are prepared to lend more where a guarantee scheme is in place and I note this is a guarantee scheme. However, it is not being availed of in Ireland and I wish to know why not,” he said in the Dáil.
Deputy Ann Phelan, Minister of State at the Department of Agriculture, Food and Marine, responded to McNamara’s questioning by explaining that the Government had yet to examine the use of financial instruments such as the low interest loans put forward by the scheme.
“I’d bet my farm on it”
It was acknowledged by Phelan that the low-interest loans as part of the RDP scheme are in existence, but these loans cannot come into operation until the banks in conjunction with the Government identify the relevant investment gap.
McNamara said he would bet his farm on the unlikelihood of the banks advising the Government to provide low-interest loans of 1.5%, when they are currently providing loans at significantly higher interest rates. He argued that the government are essentially giving the banks a veto in the agriculture industry which is holding farmers back.
Read more
Department considering providing farm finance under the RDP
SHARING OPTIONS