Banks have been called on to give farmers greater flexibility and more options in light of Covid-19.
Tim Cullinan, the president of the Irish Farmers’ Association (IFA), said that farmers need liquidity at low rates, with Covid-19 “taking its toll” on commodity markets and supply chains, as well as disrupting cash-flow.
“Many farmers and associated agri-businesses will face significant short-term operational challenges in the coming weeks,” Cullinan commented.
It’s critical that banks inject additional cash-flow rates into the system to maintain liquidity. The banks must provide farm families with the leeway to get through this extremely difficult period.
“I would encourage the banks to bring forward a special low-cost term loan. Extending overdraft facilities when rates are as high as 8% won’t cut it,” Cullinan added.
The IFA president said that he had been in contact with a number of the main banks to emphasise this point.
“While banks have said they will take a sympathetic approach, it must be matched by real and practical moves at individual account level with farmers on the ground,” Cullinan said.
Meanwhile, Rosemary McDonagh, the IFA’s farm business chairperson, said that banks “have a duty to their customers to maintain an efficient and speedy service”.
- Increase/extend working capital and overdraft facilities;
- Advise and facilitate farmers to switch from overdraft to cheaper term loans, where appropriate;
- Develop a suite of lower cost loan products for farmers;
- Allow for interest and capital repayment breaks of up to six months, with a review closer to the expiry date;
- Defer and extend loan repayment periods;
- Renew existing stocking loans and provide for additional loans;
- Provide for a three-month interest and capital repayment break on mortgage repayments;
- Suspend the need for land valuation reports.