‘Majority of dairy farms will find themselves in the red this month’
More than two months since the EU Council of Agriculture Ministers voted for the provision of short-term loans to cater for dairy farm ‘liquidity gaps’ the new Minister for Agriculture is being urged to get on with it.
IFA National Dairy Committee Chairman Sean O’Leary has called on Michael Creed to act without delay on the urgency of cash flow stresses on dairy farms, including superlevy deductions from this month’s milk cheque and merchant credit debt.
“There is now real urgency as the majority of dairy farms will find themselves in the red this month simply as a result of milk prices at around 23-25c/l which are below average production costs.
Those dairy farmers who have invested in recent years, who just saw the first instalment of their superlevy repayment 2016 leave their milk account, and carry some merchant credit or other bills, will be in even deeper financial trouble,” said O’Leary.
“I call on Minister for Agriculture Michael Creed, who has acknowledged the severe income difficulties being faced by dairy farmers, to fast track the development of the loan scheme required to give effect for Irish farmers to the exceptional state aid measures voted on last March,” he said.
Dairy Farm Temporary Finance
Last week the Department of Agriculture announced that it has commissioned a report into the feasibility of providing loans of up to €15,000 to struggling farmers.
The proposal stems from a recent agreement in Europe in relation to a further package of measures for the struggling dairy and pigmeat sectors.
Among these was the making available of more flexible state aid support.
It will now be possible for farmers (SMEs) to access temporary finance up to a maximum amount of €15,000 per farm per year in circumstances where they either:
(i) make a commitment to freeze or reduce production compared to a given reference period, or
(ii) use the funds to bridge a liquidity gap.
Aid as provisionally envisaged would be granted in the form of direct grants, loans or guarantees in the case of freezing/reducing production, and in the form of loans or guarantees in the case of liquidity assistance (remunerated in the form of an interest payment).
The latter could also be provided in grant form if accompanied by a commitment to freeze or reduce production. Interaction and discussion with the Commission is ongoing in respect of finalising the details of such provisions.