Farm Ireland
Independent.ie

Monday 21 August 2017

Six days given to pay debts

Martin Ryan

One of the country's major milk processors has employed a team of debt collectors to pursue farmers for outstanding debts.

As the cash crisis deepens on farms, debt collectors are giving farmers just six days to pay their bills in full.

Some of the top dairy farmers in the country, including those with herds of up to 600 cows, are in a cash crisis. Their wives have been forced to plead with financial institutions to allow them enough money to meet the weekly bill to provide food for their families.

James Kane, chairman of the IFA Farm Business Committee, said some dairy farmers were in a "desperate state" and more than 90pc of those in financial difficulty were never in trouble before but were now suffering because of the collapse in dairy incomes in 2009.

"Cheques are being bounced where the funds in the bank are €200 short and farmers are losing their credit rating for the simplest of things, which is terrifying for men who were never used to being in trouble," he said.

Mr Kane said some agricultural contractors were demanding payment up front because of payments still outstanding since last year.

He said the contractors were also under pressure to meet repayments on machinery and equipment.

Agri-merchants and milk processors were also pursuing payment of outstanding debts and farmers were being contacted by debt collectors for one of the major milk processors and given six days to pay up in full, he said.


Speaking after a series of meetings with all of the major banks, Mr Kane said the IFA had been assured there was money available for farmers.

"The things that the banks are looking for are nonsensical. They are asking farmers for two years' accounts, tax clearance certs, and planning approvals for sheds that were built on their farms 40 years ago," he said.

He also claimed that penal charges were being applied.

"Interest rates are being hiked by between 2pc and 5pc on loan restructuring. Some banks are charging 1pc for renewal of an existing overdraft and a charge of 1pc was made to change the name on the account from father to son, without any revision of terms or amount involved," he said.

"The majority of these farmers were never in trouble before but the drop in milk price in 2009 and the effect of the recession on off-farm investments is leaving them in a terrible situation," the IFA man claimed

"They were the kind of people that in the past could call the bank manager for a top-up without any trouble," he said.

Bills

"Hopefully the improvement in milk price will help, but farmers have a lot of bills to pay."

The banks had also expressed serious concern regarding the financial standing of farmers involved in the tillage sector, Mr Kane claimed.

"Tillage farmers have had two very bad harvests and if there is another in 2010, the banks will not provide funding for next season," he said.

The IFA has engaged specialist consultants, who will work with local county officers, to negotiate with financial institutions on some of the most difficult cases.

Mr Kane is also advising farmers to avail of EIB loans at 2.65pc through their bank if they need credit.

Irish Independent