Speciality cheeses are just one product to suffer from the ban on LEADER funding food businesses

The good news on the critical issue of LEADER’s eligibility to fund food projects is that a number of possible solutions have been identified. The bad news is that it will still be some time before LEADER companies like Kilkenny LEADER Partnership (KLP) can actually entertain new applications and that- when we can, the grant aid rate will be less favourable than heretofore.

For those of you coming new to this issue, I’d ask you to read the previous blog from the 16th of March to get a fuller background to the situation. But in summary- let’s just state that LEADER was under the false impression that it could fund food projects from its allocated funding from ‘axis 3’ of the Rural Development Programme (RDP), until queries were raised from an Irish ‘third party’, revealed that most food projects can only be funded from another part of the overall RDP- ‘axis 1’ which has no funding for food in it. Got that?

The latest news available to us is that senior officials from the Department of Environment, Community & Local Government (ECLG), which is the new home of LEADER and those from the Department of Agriculture, Fisheries & Food, which is responsible for the rest of the RDP, were due to meet last week to try hammer out a the basis of a deal which would cut this ‘Gordian Knot’ of a problem. If the officials can work out the logistics of a deal, then the senior Ministers from both departments will meet to agree the inevitable ‘prid pro quo’ of a settlement of this type when budgets are moved around.

But even if a deal is agreed among the Ministers and their departments, it will then need to be forwarded to the EU Commission to get their approval. While the indications are that the Commission is aware of the seriousness of the issue and would likely be supportive of a solution, it will still take three to four months for them to approve it. So the current best case scenario is that it will be August (at the earliest) before LEADER can approve food projects again. That’s a hiatus of over six months since the ban came in!

And there are indications that the maximum grant aid rate in axis 1 may be pegged at the lower figure of 40%, rather than the current 50% of axes 3. This may seem but a minor issue, but food business capital costs are significant in these days when banks are often –let’s say, “reluctant” to provide loans, this reduction could easily be the difference between a project proceeding or not. The relatively attractive grant aid rates of LEADER, as well as the range of non-capital, technical assistance, training, marketing, etc., are one of the key reasons that LEADER is ideally suited to support the integrated development of the food sector.

However, these are arguments for another day. For now the food business of Ireland deserve to know that the LEADER companies, department officials and politicians are working hard to get a solution. If it’s no everything we all want, then maybe- to use a terrible pun, half a loaf is better than none!

Declan Rice, CEO