Farm Ireland

Saturday 22 July 2017

ICSA urges bank to extend loan offer to beef and sheep farmers

Seamus Sherlock, chairman of the Irish Cattle and Sheep Farmers' Association.
Seamus Sherlock, chairman of the Irish Cattle and Sheep Farmers' Association.
Claire Mc Cormack

Claire Mc Cormack

Struggling beef and sheep farmers are being sidelined by Ulster Bank's move to offer "meaningful loan help" to the dairy sector, the ICSA has warned.

Last week, the financial institution announced plans to switch the loans of under-pressure dairy farmers to interest-only and advance extra working capital to customers affected by swings in milk prices.

The lender believes a number of new measures specifically designed to support the agriculture industry will help farm customers survive the effect of short-term volatility.

Although the move to alleviate cash-flow pressure has been welcomed by the Irish Farmers' Association, the ICSA are calling for "equal treatment" from banks for all farming sectors.

Ulster Bank's Dr Ailish Byrne said the lender understands farmers have specific needs, "especially during periods of milk price volatility". "As part of our drive to help our customers who have been affected by this volatility, our agri managers are speaking to customers around the country to ensure they understand we are here to support," she said.

However, Seamus Sherlock (below), rural development chairman of the ICSA, has called on Ulster Bank to look at providing interest-only loans to all farmers under pressure instead of exclusively dairy farmers.

"Beef and sheep farmers are also hurting for a number of years and would greatly be aided by a similar move from their lender," he said.

"Irish farmers as a whole are experiencing low prices coupled with high costs and many family farms are under serious threat," he said.

Although Mr Sherlock complimented the bank for their positive stance, he says Ulster Bank must show "equal empathy" to all agricultural communities.

"We need all financial institutions to take a common sense approach in these stressful times.

"Interest-only loans can go some way to relieving the financial pressure on many family farms," he said.

However, the ICSA also stresses farmers must realise that interest-only loans are just a temporary fix and should not be seen as a medium to long-term solution.

Ulster Bank is a significant lender to the farming sector. It faced criticism earlier this year for including about €100m of farm loans in a bundle of problem assets that the bank is putting up for sale.

The planned sale of the loans rankled with hard-pressed farmers.

However, Gerry Mallon, the bank's chief executive, last week insisted that a sale of loans would not include the debts of any farmer who is engaged with the bank.

"Farmers have long memories. Where necessary, we provide additional working capital and move loans to an interest-only basis. Our key message is to encourage farmers to engage with the bank," he said.

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