Farmers 'need to hold off on taking loans'
Farmers should hold off on making lump sum capital investments in the likes of milking parlours until they know the outcome of Brexit, agriculture State agency Teagasc has warned.
Teagasc’s Head of Rural Economy and Development Kevin Hanrahan pointed out that a crash out Brexit scenario would lead to a 20pc decline in carcass price for beef and nearly 10pc drop in milk price.
With this in uncertainty in mind, he urged farmers to wait until they get further clarity on Brexit before taking out million euro loans to develop their farm.
“Farmers should hold off on making big lumpy investments. I’m not saying don’t replace an old, broken down tractor because you need that to operate your farm, I’m saying don’t go looking for a loan to build a new milking parlour or for roadways on your farm that you may want to construct to add more cows to your business,” he said.
“Banks make money by making loans. They might be willing to give you a loan but we don’t want any farmer to have taken out a loan for a few hundred thousand or €1 million to find out in a few weeks that we can’t export cheddar to the UK.
“For the sake of a few weeks put the plans back in the drawer and come back to them when there is more clarity. We should have more clarity by the middle of the month.”
Meanwhile, ICMSA president Pat McCormack stated that “it’s an absolutely crazy situation that farmers do not know what trading arrangements will apply with the biggest trading partner in the next month” and called for supports to be introduced immediately.
“While we hear politicians saying that they will support the farm sector, the reality to date is that no funding has been put on the table, farmers are losing heavily already due to Brexit and we need to see concrete supports put in place immediately to provide a degree of confidence to the sector that support will be actually put in place and will make a real difference to farmers,” said Mr McCormack.