Debt crisis hits dangerous level
Thousands on brink as banks restrict credit and loans go unpaid
Published 09/03/2010 | 05:00
Farm debt has reached dangerous levels, pushing thousands into severe financial distress.
Access to credit has been cut, with financial institutions tightening lending criteria and closing off overdraft and loan facilities in many instances.
"The banks are getting so desperate for money, their attitude has changed over the past few weeks and farmers are very vulnerable," insisted Tralee-based agricultural consultant Eddie McQuinn.
"There is extra pressure being put on since Christmas and the attitude among creditors in general is more aggressive," he added.
Jim Power, of Friends First, warned that a significant number of family farms were in danger of going to the wall unless product prices recovered dramatically this year.
The latest figures from the Central Bank show that lending to the agriculture and forestry sector totalled €4.93bn in December.
This figure is down slightly from €5.2bn in September 2009. However, critically, it does not include personal loans, mortgages or other credit held by farming families. It also excludes merchant credit and amounts outstanding to suppliers such as contractors, vets and fuel companies.
Farmer representative say overdrafts of more than €100,000, three times the normal level of five years ago, have been run up on some units.