IFA CALLS ON MINISTER CREED TO USE NEW STATE AID ALLOWANCE TO RELIEVE CASH FLOW AND SUPERLEVY PRESSURES

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IFA CALLS ON MINISTER CREED TO USE NEW STATE AID ALLOWANCE TO RELIEVE CASH FLOW AND SUPERLEVY PRESSURES
11 May 2016

IFA CALLS ON MINISTER CREED TO USE NEW STATE AID ALLOWANCE TO RELIEVE CASH FLOW AND SUPERLEVY PRESSURES

Dairy, Farm Business & Credit

IFA President Joe Healy today (Wednesday) said IFA at national and county level has been lobbying TDs, ahead of the government formation last week, and into this week, to persuade them to use the new EU €15,000 State Aid concession introduced by the Agriculture Council to address serious cash flow issues on farms.

“This new EU flexibility around State Aid must be used to provide short-term loans for farmers under serious cash flow pressures, including facilitating a one-to-two year suspension of superlevy repayments and converting merchant credit. I am calling on Minister for Agriculture Michael Creed to act immediately and put these measures in place without delay,” Mr Healy said.

IFA Dairy Chairman Sean O’Leary added, “With milk prices now well below production costs, increased feed bills this spring and other financial commitments from investment loans and tax bills, dairy farmers’ cash flow situation is coming under serious strain. While markets and prices will recover, this could take some time, and farm cash flow could remain under pressure into 2017”.

“With this year’s superlevy repayments about to hit the April milk cheque, this additional pressure is not sustainable,” he said.

“The new temporary State Aid allowance of €15,000 per farmer, per year, for three years was voted on by the EU Agriculture Council in recognition of the severe income crisis in some farming sectors, including dairy, and to give member states greater flexibility in supporting those sectors. Minister Creed must see to it that Irish farmers can benefit fully from this exceptional allowance,” he said.

“The aid can cover the financing cost of short-term loans, rather than the capital, which farmers would have to repay after the one-to-two year suspension ends. The three-year superlevy repayment scheme provides the precedent and template for an interest-free loan and a repayment framework. Also, it would be possible to use similar short-term loans to help farmers convert merchant credit debt, or to deal with any other cash flow stresses on their farms,” the IFA Dairy Chairman concluded.

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