Scottish Government must back cheap EU loans for farmers
Ian Duncan MEP has demanded that the Scottish Government opt-in to a multi-billion euro fund for farmers, offering low interest rate loans to help boost rural businesses. Dr Duncan was responding to the news that the European Commission had partnered with the European Investment Bank to offer cheap credit to farmers, with rates as low as 1.5%.
The partnership was announced by EU Farming Chief Phil Hogan, who said the fund would drive improvements in the dairy sector, and help young farmers enter the industry.
In order for Scottish farmers to access the loans, the Scottish Government would have to sign up to the scheme by creating a new financial instrument. The Scottish Government has thus far given no commitment to do so.
Dr Duncan commented:
'Scottish farmers, particularly dairy farmers, are experiencing hard times. This fund could be the shot in the arm they need and I am flabbergasted that the Scottish Government has not signed up, nor given any indication that they intend to do so. Farmers need support now, why is there a delay?
'Since 2008 the Banks have been reluctant to lend, but with EU backing I am sure they would loosen the purse strings and support local farmers.
'Richard Lochhead needs to get his finger out and act now, or explain to farmers why the Scottish Government is denying them access to cheap credit'.
The fund aims to help ease access to finance for farmers and other rural businesses. Member States and regions can adapt and use the model to set up financial instruments funded by their rural development programmes (RDPs) under the European Agricultural Fund for Rural Development (EAFRD) – to secure loans for investments in farm performance, processing and marketing, business start-ups and many other areas. The European Commission is clear that once loans are repaid the money goes back in to the envelop for other projects.
The instrument is accompanied by a work programme setting out the finer detail of the Commission's and the EIB's co-operation. This is complemented by the provision of advice by the EIB to help Member States and regions better understand and use financial instruments.
Phil Hogan, European Commissioner for Agriculture and Rural Development, commented:
'Financial instruments can help us to get even more value out of rural development policy, the second pillar of the Common Agricultural Policy. By getting credit flowing more freely, they can turn one euro of public money into two euros, three euros or even more of secured loans to help our farmers, particularly young farmers, and other rural entrepreneurs create growth and jobs. The joint work by the Commission and the EIB, set out in detail today, marks a huge step forward towards making that happen.'
Notes to Editors
1. Details of the fund - http://europa.eu/rapid/press-release_IP-15-4647_en.htm
2. Dr Ian Duncan is the Conservative MEP for Scotland and chairs the ECR Working Group on the Rural Economy