The total value of Cultivate loan applications almost doubled in just two years to over €50 million in 2023.
Cultivate is an initiative involving 53 credit unions across almost 170 locations in the Republic of Ireland that provides short- to medium-term loans.
The Cultivate Credit Union’s 2023 annual review published today (Monday, April 8) shows that the value of total applications up 250% compared to 2019 levels.
The average Cultivate loan value for 2023 was €32,841, up 4% year-on-year, given to a farmer over 5.58 years who owned a farm of circa 36ha.
May was the busiest month, constituting 11% of all applications, January recorded the lowest demand, accounting for only 7% of total applications.
68% of loans were to beef farmers compared to 20% for dairy farmers.
The report shows that 2023 saw a decline in the level of debt being held by farmers, down 9% when compared to 2022.
Loan applications
The most popular purpose for Cultivate loans was for stocking and working capital (30%).
This was followed by finance for farm buildings (23% – up from 18% in 2022), equipment (17%), and tractors (12%).
The value of farm building loan applications surged by 55% to €10 million last year, driven in part by the launch of the new Targeted Agricultural Modernisation Scheme (TAMS 3).
The average loan application from a dairy farmer was €41,443, compared to €30,627 for a beef farmer.
The average debt level for beef farmers was €65,209 while dairy farmers are managing over double that, at €162,363.
Dairy farmers were also bigger landowners, owning on average 41ha of land against 27ha owned on average by beef farmers.
Off-farm income continues to be a major factor for beef farmers as 89% of applicants had some form of off-farm income, compared to 61% of dairy farmers having off-farm income.
National Cultivate Week
The annual report has been launched as National Cultivate Week gets underway today.
The event brings together credit unions and their members to celebrate farmers and the contribution they make to local communities.
The relentless rain is causing major issues for farmers at present with calls for a fodder support scheme to be put in place.
As a result, many farmers are reportedly turning to Cultivate for working capital loans to get through this difficult period.
Cultivate credit unions have said that farmers do not need to be an existing credit union member to avail of a loan.
Farmers can avail of unsecured funding of up to €75,000 over 10 years with “flexible repayment plans” available.
Minister of State with responsibility for Financial Services Jennifer Carroll MacNeill said that credit unions have “a long and proud tradition in providing innovative and compelling financial services for their members”
“It’s so good to see more and more farmers apply to their local credit union when thinking of investing in their farms or buying more stock,” she said.