‘Irish farmers operating well within their overdraft limit’
The vast majority of Irish farmers are operating well within their current overdraft limit, according to Bank of Ireland’s head of agriculture Seán Farrell.
“If €10,000 is taken as an average overdraft option on most farms, the vast majority of producers are currently drawing down between €2,000 and €2,500 of this facility,” he said.
“And these figures include dairy farmers. We continue to see agriculture as a growth sector within the Irish economy. And we are lending accordingly. There is no shortage of capital availability, where farming is concerned.”
Farrell predicted that milk prices will start to rise again in 2016.
“I am basing this assessment on the latest projections coming from dairy market analysts,” he said.
“But we treat each farmer as an individual. We are advising all our customers to work through accurate cash flows for the coming months. If this process throws up any issues, then it is better for these matters to be discussed before they become a reality.
“We are more than happy to offer a range of services, including interest only payment periods on existing loans, as a way of maintaining cash flows at adequate levels.”
Farrell confirmed that Bank of Ireland would be interested in working with the European Investment Bank on the range of financial measures promised by EU Agriculture Commissioner Phil Hogan earlier this year.
“But we do not have the full details as yet on how these proposed schemes will work in practical terms,” he said.
“However, the funding schemes available from the Strategic Banking Corporation of Ireland are up and running. These are nationally funded measures, which farmers committed to business development plans can avail of.
“If accepted for these schemes, farmers will receive a discount of 0.4% on the loan interest rates they pay,” he said.