Cultivate chairman and former president of the Irish Farmers’ Association (IFA), Joe Healy, has confirmed that the organisation’s ‘fertiliser loan’ scheme is to commence on Monday, January 31, 2022.

Cultivate is an initiative of a group of credit unions that provides short to medium-term loan opportunities built specifically around the growing needs of farming members.

Joe Healy told Agriland: “We have been discussing the scheme with a total of 40 credit unions, accounting for 120 outlets across the country.

“The loans will be made available at an interest rate of 6.5%; there will be no signing-on fee.

“All loans will be agreed on a quick, simple and local basis. Interest will only be paid on monies that are outstanding,” Healy added.

Fertiliser loan scheme

According to the chairperson, fertiliser sales in Ireland last year amounted to €500 million.

“This year, we could be looking at a figure in the region of €1.2 billion. Last year, I personally bought urea at a price of €320/t. Earlier this week, I procured the same product at €900/t,” Healy explained.

“Fertiliser is one of the most expensive inputs incurred on Irish farms. Cultivate has been approached by fertiliser merchants around the country, highlighting the expense they have incurred by procuring fertiliser in the first place.

“As a consequence, many of these businesses will not be able to extend normal credit terms to farmer-customers this year. It was for this reason that Cultivate recognised the need to develop a credit union based response to the fertiliser challenge now facing Irish agriculture,” he added.

When asked about the option of farmers going to their banks and asking for an overdraft extension, Healy replied:

“Many farmers now believe that the banks no longer provide a service that fully recognises the needs of family businesses.”

Government support

Meanwhile, low-cost loans will continue to be available to Irish small and medium-sized enterprises under the Covid-19 Credit Guarantee Scheme (CCGS) until June 30, 2022.

The government decision was confirmed by Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar.

The scheme is available through a wide range of lenders including three banks, six non-bank finance providers and 19 credit unions.

Unsecured loans of up to €250,000, at reduced interest rates are available to SMEs, primary producers and small mid-caps (companies employing less than 500).

To date, the scheme has approved loans to more than 9,000 businesses. The government has said that this is the most rapid deployment of such a level of lending to businesses in the history of the state, with the scheme operational since September 2020.

According to the government, the continuation of the scheme will provide options for small businesses who need increased liquidity as they move toward a changed, but more stable, trading environment.

The Tánaiste said: “The Covid-19 Credit Guarantee Scheme is the largest state guarantee in the history of the state.

“It has been a very useful option for over 9,000 small and medium-sized businesses and primary producers since its launch in September 2020 and we estimate that over 63,000 jobs have been maintained which would otherwise have been at risk without the scheme.

“The extension of this scheme will give business a level of certainty that if they need liquidity, they will be able to access low-cost loans, unsecured up to €250,000.”