Banks and co-ops urged to follow Glanbia's lead on loans
The country's co-ops and banks are being urged to set up new finance packages offering competitive loans to farmers after Glanbia unveiled a €100m fund linked to milk price.
Glanbia said they expected strong interest in the loans based on an interest rate of 3.75pc above the Euribor rate, currently at zero. The loans are targeted at their average suppliers expanding from 70 cows to 100 cows.
The ICMSA's dairy chair Gerald Quain said the scheme's milk price 'triggers' - which see loan repayments suspended during periods of low milk prices - would help suppliers.
He urged other financial institutions, including the pillar banks and co-ops to draw up "similarly flexible and robust schemes" to Glanbia's 'MilkFlex' fund which is financed by the Rabobank, Ireland Strategic Investment Fund, Glanbia Co-op and Finance Ireland.
Following the dairy forum meeting where interest rates figured strongly, TJ Flanagan, chief executive of the Irish Co-Operative Society (ICOS), said they hoped it would put pressure on the pillar banks to make a similar financial measure available.
"It would be great if other co-ops were in a position to do it but the smaller ones couldn't."
He said some of the pillar banks could go to other co-ops and team up with them to make funding available.
At last week's Dairy Forum meeting, the banks had been challenged about their interest rates' policy.