The Minister for Agriculture, Food and the Marine, Michael Creed T.D. has announced that payments will start to issue today to Irish dairy farmers in respect of Phase I of the EU voluntary supply management scheme for dairy. The scheme was a short term market stabilisation mechanism introduced by the EU Commission last year as part of a range of tools to mitigate price volatility in the Dairy sector.Minister Creed said, “I am pleased to announce that my Department has commenced payments under Phase 1 of this scheme which will see almost €6.5m paid out to 3,500 Irish dairy farmers who applied for aid to reduce their production in the last quarter of 2016. This will provide a significant cashflow boost to dairy farmers at an important time of year. I would like to acknowledge the initiative of Commissioner Hogan in coming forward with the scheme as part of their response to dairy market volatility last year.”
In reference to the wider suite of volatility mitigation support measures brought forward by the EU Commission, of which the Voluntary Supply Management Scheme was a part, Minister Creed stated, “The €11 million allocated to Ireland from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’ was used in an innovative way, together with €14 million in national funding, to contribute to the Agriculture Cashflow Support Loan Scheme. This scheme, developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI), has made €150 million in loans available to farmers in all sectors, at interest rates of 2.95%. This scheme provides farmers with a low cost, flexible source of working capital, which will allow them to pay down more expensive forms of short-term debt.”
The Minister went on to say, “I am pleased at the very favourable reaction by farmers to the scheme, which has proved that significant demand exists for low cost flexible finance. I hope that the commercial banks will respond positively to this demand by reducing interest rates and providing more flexible terms for cash flow loans in the future. I plan to meet with the Chief Executives of the banks shortly to discuss this and other issues relating access to finance in the agri-food sector.
Minister Creed concluded, “Thankfully the global dairy markets have improved considerably in recent months and returns to producers here are considerably improved from last year. There is no room for complacency of course and vigilance is required to ensure that the effects of market volatility are mitigated as soon as possible. There are other challenges for our dairy sector of course not least the potential impacts of Brexit. Broadening our reach to other markets is the best response to this issue and I look forward to leading a number of trade missions this year to further highlight the world class dairy products which Ireland offers the world”.