NEWS

€1 billion cheap loan scheme to encourage Waterford young farmers to stay in the business

WaterfordLive.ie

Reporter:

WaterfordLive.ie

Email:

news@waterfordlive.ie

'We need to encourage young farmers in Tipperary to stay in the business'

Ireland South MEP Deirdre Clune has welcomed news that young farmers in Waterford can share in a €1 billion cheap loan scheme

Ireland South MEP Deirdre Clune has welcomed news that young farmers in Waterford can share in a €1 billion cheap loan scheme.

The scheme is designed to increase the number of young farmers staying in the business.

“There are many issues that young people in farming have to face and finance and access to finance is one of them," MEP Clune says. 

"This should hopefully go a long way to improving the situation and ensure that the future of agriculture in Ireland is sustainable.

“I know that Macra na Feirme has campaigned for this to encourage young farmers to stay in the business and I commend them for that. We are constantly working at EU level to ensure we do what we can to make sure that the farming community in Ireland is listened to. This new scheme is the largest ever move by the European Investment Bank to help support farming. I believe this scheme will offer rates of about 3%, which is lower than current bank rates," she adds. 

The programme will be managed at member state level by banks and leasing companies operating across the EU. Participating banks should match the amount committed by the European Investment Bank (EIB), therefore bringing the total amount to a potential €2 billion, and priority should be given to young farmers.

The programme will address many of the current shortcomings that farmers face with, including lower interest rates; longer periods of up to five years to start repaying the loan; longer periods to pay back the whole loan (up to 15 years); and added flexibility, depending on the conditions, to respond to price volatility in the agricultural sector to ensure that farmers remain able to pay loans back in difficult periods (for instance, through a ‘holiday/grace' period allowing farmers not to pay back for a few months).

Two pilot loans of €275 million are about to be implemented in France through this scheme. These loans are specifically targeted at young farmers and climate change mitigation.

This new loan programme is part of a joint Young Farmers initiative between the European Commission and the EIB that aims to bring together existing European Agricultural Fund for Rural Development (EAFRD) support and the financial means and expertise of the EIB. In addition to the loan package, this includes a continued use of the EAFRD grants for young farmers and start-ups that can be used as interest rate subsidies or for technical assistance, in combination with financial instruments. In addition, the EIB and the European Investment Fund (EIF) offer advisory support and expertise to managing authorities.

More information is available online.