The Irish Farmers’ Association (IFA) has met with two of the country’s main banks to discuss cashflow for dairy farmer customers affected by the drop in milk price of late.
A delegation from the association met with AIB and Bank of Ireland as part of a plan developed by the IFA National Dairy Committee to assist farmers with any potential cashflow issues due to the substantial drop in milk price.
The purpose of the meeting was to explore what financial support options are available to dairy farmers.
Banks
IFA Dairy Committee chair Stephen Arthur said both banks advised that farmers should be encouraged to get in touch early if they think they might need cashflow support for their businesses.
“Farmers should recognise, quantify and communicate their needs to their bank sooner rather than later was the advice,” Arthur said.
A suite of options is available to farmers, including loans for capital expenditure already carried out; stocking loans; and short-term working capital facilities to fund tax or other farm expenses.
Other options include interest-only repayments; extension of overdraft facilities; and in certain cases, an extension of loan terms.
IFA Liquid Milk chair Keith O’Boyle said that it is vital that farmers spend time looking at all the options as the terms and interest rates applicable vary considerably.
“A knee-jerk reaction would be to request an extension to overdraft facilities, but that is the most expensive form of credit,” O’Boyle said.
“Farmers need to sit down now and do a cashflow forecast into next year to enable them to assess their individual situation.”
IFA plans to meet other financial providers in the short-term and said it will issue a guidance document to its members on all options available.