Timeline for roll-out of low-cost loans sought
NEW ICMSA Farm Business Committee chairperson Shane O’Loughlin has called for a clear timeline on the roll-out of the Farmer Low- Cost Loans announced in Budget 2018.
Aughrim farmer Mr O’Loughlin said that farmers are currently making their projections and financial plans for the coming year and for 2019/20 and that a key part of this planning is the availability of credit at a reasonable rate.
He pointed out that just as important as when the loans were delivered was the question of who they would be made available to.
Last year’s fund, which was administered and lent out by SBCI through the Pillar banks, was completely drawn down in an extremely short period, demonstrating the extent of demand and what Mr O’Loughlin calls the ‘consistent underestimating’ of the financial challenges faced by farmers.
‘ The first issue for ICMSA is that this tranche of loans must go to those most deserving of this specifically low-cost option – and not just those who got in quickest on the “first-past-thepost” system that was applied last year despite our criticism. Very many of those who most needed that credit last year either failed to get it or were too late as it took time to put the necessary documentation together,’ said Mr O’Loughlin.
He said a second issue arises around the constant and longterm problem of funding being made available at competitive, realistic, interest rates within Irish credit institutions.
‘Farmers are asking – certain- ly ICMSA is asking – why ‘ low cost loans’ in Ireland are made available at interest rates that are still well above those being charged by mainland European banks on their farm loans. Farmers are being overcharged and there is a responsibility on Government to ensure that we have funds available to borrow at the kinds of rates that are routinely charged by comparable mainland EU banks who borrow their money from the same sources as our banks and at the same rates. It is time for these so-called ‘ low cost loans’ to be the norm for all farm businesses across the country and keep credit and investment in rural Ireland where the economic multiplier effect of farm purchases is a huge commercial plus for the wider local economy’, he said.
‘Let’s get the loans ready and deliberately focus them on the farmers who need them – not who can get the paperwork in fastest – and then start looking at medium and long-term farm financing at the kind of rates that the mainland EU banks charge and on which they seem to be able to make a margin.’