Northern Ireland banks to Brexit-proof new farm loans
Farmers in Northern Ireland seeking to increase their borrowings in the run-up to Brexit may find themselves undergoing a new proofing process by the banks.
This will involve number-crunching projected profit margins that are based on a proportion, possibly as low as 30%, of the Basic Payments currently available from Brussels.
In most years, the Basic Payment represents almost the total profit generated by the North’s 20,000+ cattle and sheep farmers.
“Total uncertainty surrounds the outcome of the Brexit negotiations,” said Danske Bank Senior Agribusiness Manager Seamus McCormick.
But there seems to be an expectation that London will reduce the level of direct payments on offer to farmers once Brexit becomes a reality.
“And, as a bank, we have to take this factor into account when dealing with farmers’ future borrowing requirements. We used a similar approach in the run-up to the last reform of the Common Agricultural Policy.”
McCormick made the comments while visiting this year’s Ballymoney Show. He said: “We would also be keen to have future support arrangements specifically targeted at those farmers who are actually producing food.
“The current Basic Payment Scheme restricts eligibility to so-called active farmers. But this term is not fully synonymous with those producers who are working full-time to develop their farming businesses.
“Once agriculture in Northern Ireland comes under the auspices of a UK agricultural policy, we would like to see support systems tied to those who are fully committed to developing sustainable farming businesses.”
“The weakening of sterling against the euro is making a real and positive difference for livestock farmers at the present time.
“Strengthening milk prices can be attributed to a combination of currency changes plus international supply and demand factors.”