ICSA – ‘Extend EU aid to indebted farmers’

FARMERS with expensive merchant credit and unsustainable overdrafts must be given the same access as new loan applicants to the €150m low interest fund which was announced in the Budget.

The ICSA has insisted that the €150m fund must not be exclusively used for additional borrowing on Irish farms and that those who wish to restructure merchant credit or overdrafts should be facilitated.

ICSA president Patrick Kent has also called on the Minister for Agriculture, Michael Creed, to clarify the criteria under which loan applications from the fund will be assessed.

“ICSA does not want to see this money targeted only at large scale dairy expansion,” Kent said.

“ICSA is adamant that the money sourced from the Strategic Banking Corporation at 2.95pc must be available for those who wish to reduce debt and consolidate, as well as for those who have carefully assessed the case for expansion, extra facilities or land improvement,” he said.

“ICSA is also concerned that some farmers will be sucked into borrowing unsustainable amounts to expand livestock farming systems that are simply not providing a decent return on investment or even a viable income. If increasing output does not stack up at 6pc interest, farmers are only fooling themselves if they think that borrowing money at 2.95pc changes the reality,” he added.

“There is nothing wrong with well thought out investment in a business if the underlying system is profitable and in these cases, getting money at 2.95pc will be helpful.

“However, for the majority of farmers, reducing debt must be a priority and all the more so in the context of the uncertainty around Brexit,” he added.

The fund will use €11m in EU aid for the dairy and livestock sectors, backed up by State monies, to lever €150m in low interest loans from the Strategic Banking Corporation of Ireland (SBCI).

Farmers applying for loans through the fund must do so through the main banks.