Farm Ireland
Independent.ie

Monday 20 February 2017

Independent view: Optimism's out there but credit is still a concern

Published 15/02/2011 | 05:00

The general 'feel good' factor in farming was evident at the IFA dairy conference in Citywest, Dublin last week and at the FTMTA's Farm Machinery Show in Punchestown.

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The two events were well attended and the talk in both places was all about the positives, expansion and increased investment.

However, no industry exists in splendid isolation and the impact of the banking crisis and the consequent lack of credit influenced discussions in the two centres.

While companies such as AGCO and JCB have expanded their finance operations over the past 12 months, the difficulty in securing credit for new and second-hand machines was one of the main talking points at Punchestown.

Industry sources agreed that last week's event had been one of the best for some time, with a lot of business done during the first two days.

Strong grain prices last year and the promise of more to come this harvest certainly helped to give farmer buyers more confidence.

Similarly, contractor sentiment was buoyed by the lift in cereal grower returns, and by the improved fortunes of dairy farmers.

Recovery

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But fears were expressed by independent machinery dealers that difficulties in securing credit would seriously hinder any sustained recovery in the trade.

Traditional lenders, such as AIB's agri-finance team, were at pains to point out that they were open for business and that they had money to lend -- where the deals made sense.

However, having talked to a number of contractors, farmers and machinery dealers, it appears the banks must do a lot more lending and a lot less talking about lending if they are to win over the sceptics.

Finance was also a hot topic in Citywest, particularly discussions around who would fund any future expansion in the country's dairy processing capacity.

The publication of Dr Sean Brady's 55-point plan for dairy expansion formed the basis for some very frank and open discussions at the IFA dairy conference. Given the insistence by Barry Henry of Rabobank that the Dutch outfit were interested in getting involved in the Irish dairy sector, providing funding for future expansion may not be as big an issue as it is for the machinery sector.

The question of who pays, and who will be looking for the funding, will be a different proposition though.

This is an emotive issue and one that has already provoked heated exchanges at farmer meetings.

It won't be an easy one to sort out.

Indo Farming