Banking on agriculture
The agri-business sector has been a consistent mainstay of the Irish economy for generations. However, today, given that almost a quarter of a million people rely on it for their livelihoods, and the fact that the industry accounts for over €9bn of exports every year, it is perhaps more important than ever before. This is according to Bank of Ireland’s Sean Farrell.
“With a global reputation of providing some of the world’s finest produce to more than 170 countries, those working in the sector have cause for real optimism,” he said. “It already has an annual turnover of €26bn with the potential to create a further 40,000 jobs according to the latest research.”
According to the Head of Agriculture, the future for the sector is very bright indeed and Bank of Ireland is open for business. “But to take advantage, Irish farmers and agri-business owners need assistance,” he stressed.
“Similar to all businesses, sourcing capital and securing investment is central to a healthy commercial future. What’s more, a growing global population gives rise to significant opportunity which, if supported properly, can provide huge benefits for Ireland as a whole – almost €24bn of the €26bn generated every year goes directly back in to the indigenous economy.”
In terms of expansion plans, he said Bank of Ireland’s doors are always open.
“Rising income levels worldwide, and the rise of middle classes in countries such as China, is good news for those in the sector here. As demand for quality food and drink increases, so too do plans for expansion and growth for farmers and agri companies of all sizes.”
To get there a number of national initiatives are helping farmers, food producers and drinks manufacturers to thrive, he said.
“The latest Common Agricultural Policy for Europe is likely to be in place next year, which will help preserve the countryside for years to come. It will also offer added security for Irish farmers for the next seven years – beef, tillage, dairy and sheep farmers will receive an estimated €1.8bn a year for the duration of the new agreement.”
The head of agriculture at Bank of Ireland said that all this helps fuel a sense of deepening optimism. “Indeed, Bank of Ireland are meeting an increasing proportion of the island’s farming community who plan some form of expansion in the next five years.”
According to Farrell, while there are plenty of positives, more is needed if the Irish agri sector is to remain competitive in the global market.
“The sector itself was revolutionised by entry into the EU four decades ago. As the evolution has gathered pace, so too have levels of innovation, and Bank of Ireland is very well positioned to help those who want to exploit new and exciting opportunities on the world stage,” he said.
When it comes to farm development, Bank of Ireland said it can provide funding for up to 15 years.
“We can also provide funds for the purchase of dairy breeding stock over a period up to seven years. Furthermore, Bank of Ireland Finance also offers hire purchase and leasing products for the purchase of machinery.”
Farrell added that its farm development loan is central to the bank’s business and is available to assist farmers to buy more land. “We can provide a term loan that can extend, in a lot of cases, up to 20 years.”
The bank’s confidence in the sector is the catalyst behind its strong support and Farrell claimed comfort with the risk profile of the industry as a whole. Moreover, he added that the development and growth of Ireland’s agri sector could be more important to the country’s social and economic future as the highly celebrated, digital, multi-media and IT industries.
“For every euro of net profit generated in the agri sector, a significantly higher percentage of that remains in this country. Arguably, therefore, agri-business is equally if not more beneficial to the economy than some of the more modern industries and companies that have set up their European base here. On the whole, agri-business makes a considerable contribution.”