The country's main banks were issued a stark warning by Minister for Agriculture Simon Coveney last week when he told them that they must not allow young farmers to become over-burdened with debt.
The minister said he had seen situations in New Zealand when the dairy industry expanded rapidly where young farmers got into debt that they did not have the capacity to repay.
"There is an onus on AIB to give leadership to ensure that we don't allow our young farmers to get into too much debt too quickly," he said.
Mr Coveney added that the banking sector must look at new types of loans such as chattel loans to improve access to finance for a growing farming sector.
"The anecdotal evidence that I'm getting from farmers is that they're finding it difficult to access capital so we need to look at cattle and livestock as liquidity for borrowing," he said.
In a broad-ranging address, the minister also expressed his concerns about a looming superlevy situation.
"There is a danger of farmers getting put out of business before they get going because they hoped that some politician was going to solve their quota problems," he said.
However, Mr Coveney is still upbeat about the prospects of growth in the agricultural sector, particularly in dairying.
"We will see milk production literally double in southern counties of Cork, Waterford, Kilkenny and Tipperary if we hit the targets laid out in the Food Harvest 2020 report," he said.
In relation to beef, he said that the beef sector had already expanded its output by 10pc in the last 12 months.
He also revealed that the big three accountancy firms, Deloitte, KPMG and Accenture, all have teams of high-level analysts helping the Department of Agriculture carry out expenditure reviews for free. However, he stressed that the awarding of contracts would not be influenced by these companies not charging for the consultants' time.