Call for farming bodies to monitor the banks
Tuesday February 09 2010
Farming organisations should identify banks that are dealing reasonably with farmers in financial difficulty, an independent financial adviser has said.
Agricultural consultant Philip Maher, who specialises in financial matters, told a farmers' conference in the Lismullin Institute, Co Meath, that banks had lost the moral high ground and needed to take a long-term view when dealing with farmer debt.
"Generally, banks will work with farmers to find optimum solutions," Mr Maher said.
"I think it's the job of the farm organisations to show where these banks are and what they are doing."
Mr Maher said that, despite the difficulties facing some of the 40pc of farmers who had high borrowings, farming was still in a strong financial position.
"That leaves us with about 48,000 who did borrow. If this was 10,000 it would be the equivalent of the numbers that were in trouble in the 1980s," he said.
He estimated that, with combined borrowings of €12bn, farmers had a net worth of €95bn and still owned 82.5pc of their assets.
Worth
He calculated that a 100ac, intensively stocked farm with €200,000 in borrowings still had a net worth of €1.2m.
Referring to on-farm investment in buildings and new facilities, Mr Maher was also critical of the Department of Agriculture saying that a lot of the exuberance was not just farmer-driven.
"The Department of Agriculture had extremely high specifications, which caused a lot of farmers to overspend.
"Did we really need concrete that was strong enough to build a nuclear power station to build a slatted shed or a silage pit?"
He said a lot of farms had incurred expense due to the high cost of family settlements where land was valued at €20,000/ac.
"It was very easy for a farmer who was retiring to become very generous with his son's money.
"A lot of these problems are now coming home to roost."
Mr Maher advised farmers that they should not rule out getting involved in a rural employment scheme through a Leader programme, especially in the absence of other off-farm job opportunities.
He pointed out these programmes paid about €12,500 per annum and pondered how many cattle would have to be reared for the same return.
- Majella O'Sullivan
Irish Independent
