Minister for Agriculture Michael Creed has confirmed that Ireland is line for a €200m fund from the EU for investment in primary food processing.

The money will come from the European Commission under EU agricultural state aid rules.

The approved scheme will provide grant aid for investments to SMEs and large companies engaged in the processing and marketing of agricultural products.

The Irish Farmers Journal understands that the state aid, which is aimed at supporting long-term capital investments, is most likely to be taken up by dairy co-ops to diversify and add value to their products.

Investment hurdle

Market research has shown that there is potential for growth in the sector, in particular on global markets, but low margins within the food processing sector hampers capital investment by companies.

The scheme will bridge this funding gap by making a grant available to encourage innovative investments which would otherwise not be viable.

The grant aid of €200m will be available over six years and has been assessed by the European Commission to ensure it will have no significant impact on trade and competition.

It will also contribute to the EU's objective of ensuring viable food production and promoting intelligent and sustainable growth.

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