There is an urgent need for competition in a banking sector “that is fast becoming a duopoly between the two main banks” – with the government called on to support other entities in expanding the provision of farm loans and financing.

The calls were made by the Irish Creamery Milk Suppliers’ Association (ICMSA), which also underlined the need for Ulster Bank customers to be given a viable alternative source of banking going forward.

Responding to the Minister for Agriculture, Food and the Marine Charlie McConalogue’s meeting with Ulster Bank, Shane O’Loughlin, chairperson of ICMSA Farm Business Committee, welcomed the minister’s intervention on this matter, adding:

The government must ensure that a third entity emerges in the banking sector and real competition in banking services and finance for all sectors of the economy – including agriculture.

“This has to be accessible across the country and it has to provide credit to farmers and other SMEs [small and medium enterprises] at rates that are in line with other EU member states,” he said.

“That is categorically not the situation currently and, while we continue to wait for that to happen, schemes like the Future Growth Loan Scheme and Credit Guarantee Scheme need to be expanded and offered through institutions like An Post and credit unions to give farmers at least those options instead of funnelling everything through the two main pillar banks.

“There have been encouraging signs in recent years with credit unions and An Post offering loan options for the agriculture sector, but these initiatives now need further support from government to ensure that farmers and other SMEs have options around access to competitively priced credit,” O’Loughlin added.

With interest rates on deposits now often negative, the cost of credit from Irish banks is “exorbitantly excessive”, the chairman claimed.

We have to repeat our conviction that agencies such as the Central Bank and the CCPC [Competition and Consumer Protection Commission] need to play a much more active role in regulating the banking market and introducing updated legislation – if required – that ensures that Irish interest rates are in line with our EU competitors.

“We cannot allow two companies to effectively control credit supply to farmers and other SMEs in Ireland – and only the government can halt and reverse that very negative possibility,” O’Loughlin concluded.