Farm Ireland
Independent.ie

Saturday 19 August 2017

ICMSA warns banks on rates

Shannonbridge dairy farmer Eamonn McManus, left, a constituent of Brian Cowen, caused quite a stir when he challenged the Taoiseach at last Friday's ICMSA annual general meeting
Shannonbridge dairy farmer Eamonn McManus, left, a constituent of Brian Cowen, caused quite a stir when he challenged the Taoiseach at last Friday's ICMSA annual general meeting

Martin Ryan

A warning shot has been fired across the bow of the Irish banking sector on uncompetitive interest rates for farmers.

ICMSA president Jackie Cahill warned that farmers would move their business outside of the State unless charges are brought into line.

Speaking at the 60th annual general meeting of the ICMSA, Mr Cahill said the farmer body was in the process of developing alternate sources of farm finance.

"ICMSA has, in conjunction with co-ops, developed a plan to secure farm finance from non-Irish banks in the euro area if the margins charged by Irish banks move significantly out of line with other countries," Mr Cahill said.

He also called for the Commission for Electricity Regulation to be abolished and electricity costs reduced in line with neighbouring economies.

Ambitious

The ICMSA leader said input costs to farming had to be challenged if the industry, which was responsible for 255,000 jobs, was to meet the ambitious growth targets set out in the Food Harvest 2020 report.

He told the 300 delegates that every 1pc increase in interest rates was adding €50m to Irish farm production costs annually.


"The system we are examining would involve farmers 'pooling' their borrowings into €10m lots with the help of their co-ops and the financing of these 'borrowing blocks' from banks operating in other EU member states," Mr Cahill said.

He warned Irish lending institutions that they should be very well aware that this facility now exists and the day when farmers were tied to the Irish banks was over.

Irish interest rates were 1.5pc over those available in other EU states and other interest charges 0.5pc higher. Electricity charges to farmers were now 4.2pc higher than Britain and 2.5pc higher than the EU average.

Mr Cahill called for decisive Government action in bringing down costs, including the cost of the public sector wage bill, and charges levelled by professionals in particular, because the time for fudging these issues was over.

Squandering

"We can only look aghast at the squandering of resources and the poor performance of a whole raft of State bodies," he claimed.

"In deciding the adjustment that will apply in the agricultural sector, the Government must first look at considerably reducing the public sector overheads in terms of salaries and other costs.

Detriment

"In this regard, I would refer to the recent decision by the UK Government to reduce the number of quangos reporting to their equivalent of the Department of Agriculture from the figure of 92 to 39."

Mr Cahill also referred to the control of multinational retailers to the detriment of both farmers and consumers with the retail margin on liquid milk increased and the share of the retail price that farmers actually receive falling from 43pc in 1995 to 26pc last year.

Irish Independent