RURAL DEVELOPMENT groups cannot properly fund small rural food producers because of EU rules and this is endangering the future of 300 rural-based food companies and a possible 3,000 jobs, it was claimed yesterday.
Details of the difficulties were raised at the Irish Rural Link (IRL) conference in Castlepollard, Co Westmeath, which heard rural development and Leader groups could give grant aid for refrigeration but not for a machine to manufacture. “We can provide funding for a farm shop but not for a machine which would allow someone to manufacture sausages from that farm,” said Joe Potter, chief executive of Westmeath Development Company.
The confusion had arisen at State level within the funding structures of the €5.7 billion rural development programme. Ireland and other EU countries have been unwittingly breaking Europe’s rules by funding food projects out of the wrong section of Common Agricultural Policy (Cap) funds.
Now, Mr Potter said, in the negotiations on the Cap, we may see a shift of funds from one programme to another which would allow manufacturing elements of small businesses be funded.
Irish Local Development Network, the national network of Leader companies, and IRL at its conference called on the Government to solve the situation.
Minister of State for the Environment Willie Penrose said lack of credit was crippling small businesses in rural areas and he felt it was time, given the taxpayers’ guarantee to banks, there was some payback.
“We have now recapitalised the banks – indeed they are over capitalised and now they should provide the capital designed to help these companies, many of them rural based,” he said.
Irish Farmers’ Association president John Bryan, rejected IRL claims about European funding.
“This organisation is looking for increased Leader funding as part of the post-2013 Cap review. Ironically, Leader funding made available to Ireland under the current rural development plan has not been drawn down. Seventy five per cent remains unspent from an allocation of €466 million, which illustrates the lack of impact by the organisations that Irish Rural Link claims to represent,” he said.