Farm Ireland

Thursday 23 November 2017

Banks need to work with our farmers

Declan O'Brien

Declan O'Brien

The extent of the credit squeeze and increased debt is becoming a very serious consideration at farm level.

The credit crunch is having an impact right across the various sectors, with banks tightening up lending criterias and merchants refusing to give credit where debts were not cleared last season.

Following the longest and most severe winter in decades and sustained loss-making in milk, beef, pig and grain farms, IFA president John Bryan said the income and cashflow crisis on tens of thousands of farms was at breaking point.

This week the IFA president called on beef, dairy and pig processors to immediately secure increases across all commodity prices to help alleviate the crisis.

Whether this call is heeded or falls on deaf ears has yet to be seen. However, the impact of the crisis must not be underestimated.

Input costs will certainly have to be cut dramatically. The reduced demand for seed this year is already having an impact in this area, with deals reportedly being done for as as low as €365-380/t.

The IFA president again called on the banks to support farm families by extending credit to get them through this critical period.

Given the extent of the support being offered to the financial institutions by taxpayers, this is not an unreasonable request.

Also Read

Mr Bryan pointed out that the Government had a major responsibility to ensure that the banks provided credit and cashflow funds to farmers, co-ops and merchants to get the farm sector through this income crisis.

CSO statistics for last year make for sorry reading. Farm incomes fell by 30pc, milk prices were down 31pc, beef prices were back 11pc, pig prices fell by 9.5pc and grain prices collapsed by 29pc.

Apart from a slight recovery in the dairy sector and a lift in sheep prices, the outlook for this year remains uncertain.

Putting more people out of work is not a feasible option. The banks need to work with farmers.

Irish Independent