ICMSA concerned at shrinking pool of bank finance options
ICMSA has informed Agriland of its growing concern regarding the diminished range of banking options for Irish farmers. This follows on from the separate announcements made by Danske and ACC banks last week.
“For some time now it has been possible to identify a distinct pattern in our farming and broader agri-food sector,” explained ICMSA’s Cathal MacCarthy.
“The reputation of our food and farmers and the dynamism of our food companies’ exporting capacity is being hampered by an inability to get our domestic policy ‘ducks’ in a row. To a degree, getting those ducks in a row is effectively beyond our domestic policy capacity. A perfect example of this is the decision of Rabobank and Danske to pull the retail banking plug on ACC and National Irish banks respectively with the implications for farm loans and credit that must inevitably follow.
“The decision to effectively close these banks has been made by overseas financial owners and is being made – as far as those institutions are concerned – on an absolutely clear business basis. The problem ICMSA has is that it means that the number of banks whom farmers can approach for the credit necessary to, for instance, expand production post-2015 has been severely curtailed and we are reverting to a ‘two-and-a-half’ banks model that removes the competition we so desperately need in terms of credit availability and bank charges.”
He added: “The question of the cost of banking is something that is going to loom increasingly large as the ‘foreign’ banks disappear and leave consumers to the tender mercies of our old ‘Big Two. While the ability of the Government to interfere meaningfully in the decision of RBS and Rabobank to quit the Irish market can’t be exaggerated, ICMSA has every right to expect our financial regulators to take a very close interest indeed in any adjustments the remaining banks propose making to their charges.
“This is absolutely fundamental to the realisation of the very ambitious plans set out in Food Harvest 2020. Farm families will need access to credit to expand their production and invest in the plant and buildings required. But if the remaining banks simply look on our farmers as in some sense, ‘a goose to be plucked’ then all the increased targets contained in the report and in which the Government has set such store will remain just that: paper targets.
MacCarthy concluded: “The laying down of some unalterable ground rules for the banks in terms of the charges they can levy on farmers and SMEs will have to become a priority for the Government.”