The need for banks to be supportive to farm businesses through periods of downturn in prices of farm produce was highlighted this week at a stakeholder event organised by First Trust Bank.
Tony O’Neill, chair of the Agri-Food Strategy Board (AFSB), revealed that the board has written to the banks on the matter and he had taken the opportunity to speak about it to the head of First Trust Bank, Des Moore, on Wednesday at the event in Hillsborough.
O’Neill told the Irish Farmers Journal that the AFSB is acutely aware of the setback that could occur on some newly established or expanding dairy farms in the coming months if banks do not adopt a supportive and understanding policy. The same could apply to some farms specialising in other enterprises. Generally, these are businesses on which production is increasing and growth of output is the strategy for which the AFSB wants to see support.
In answer to a question on the matter, Brian Gillan, head of business banking at First Trust, said that the bank was aware of the need to support its business customers during a downturn and will do so.
At the same time, Gillan said that with the cyclical nature of markets, the bank would also expect customers to retain money at times when selling prices are strong. Gillan would not be drawn on the level of milk price in cashflow budgets used to support planned borrowings by dairy farmers but he said that, often, the bank makes its judgement about loan repayment capacity based on the track record of the customer.
Coincidentally, UFU deputy president Barclay Bell asked Brian Gillan if First Trust had considered offering a loan product that would provide a break in capital repayments, when necessary, while the farmer could maintain payments of interest due. Gillan said that the bank would be prepared to look at that possibility.
First Trust’s share of farm lending in Northern Ireland is small. But it is targeting the sector for growth, with an agri-food fund of £50m available and a team of 16 contacts based in bank branches around NI. A technical specialist is to be appointed soon.
Repayment
Since its launch in July, £16m of this funding has already been committed. Repayment periods of up to 20 years are possible (for land purchase) and flexible repayment schedules can be arranged. In most cases, there is no arrangement fee.
The funds are available for a range of purposes, including:
A ‘‘farmer credit line’’ for seasonal purchasing needs, with interest at 3.25% over First Trust base level and no arrangement fee.Energy efficiency loan of up to £250,000 for investment in solar, wind, hydro, biomass or any energy saving system, with interest at 3.95% over First Trust base and an arrangement fee of 1% up to a maximum of £750.Young farmer current account with no transactional fees for the first three years.
The need for banks to be supportive to farm businesses through periods of downturn in prices of farm produce was highlighted this week at a stakeholder event organised by First Trust Bank.
Tony O’Neill, chair of the Agri-Food Strategy Board (AFSB), revealed that the board has written to the banks on the matter and he had taken the opportunity to speak about it to the head of First Trust Bank, Des Moore, on Wednesday at the event in Hillsborough.
O’Neill told the Irish Farmers Journal that the AFSB is acutely aware of the setback that could occur on some newly established or expanding dairy farms in the coming months if banks do not adopt a supportive and understanding policy. The same could apply to some farms specialising in other enterprises. Generally, these are businesses on which production is increasing and growth of output is the strategy for which the AFSB wants to see support.
In answer to a question on the matter, Brian Gillan, head of business banking at First Trust, said that the bank was aware of the need to support its business customers during a downturn and will do so.
At the same time, Gillan said that with the cyclical nature of markets, the bank would also expect customers to retain money at times when selling prices are strong. Gillan would not be drawn on the level of milk price in cashflow budgets used to support planned borrowings by dairy farmers but he said that, often, the bank makes its judgement about loan repayment capacity based on the track record of the customer.
Coincidentally, UFU deputy president Barclay Bell asked Brian Gillan if First Trust had considered offering a loan product that would provide a break in capital repayments, when necessary, while the farmer could maintain payments of interest due. Gillan said that the bank would be prepared to look at that possibility.
First Trust’s share of farm lending in Northern Ireland is small. But it is targeting the sector for growth, with an agri-food fund of £50m available and a team of 16 contacts based in bank branches around NI. A technical specialist is to be appointed soon.
Repayment
Since its launch in July, £16m of this funding has already been committed. Repayment periods of up to 20 years are possible (for land purchase) and flexible repayment schedules can be arranged. In most cases, there is no arrangement fee.
The funds are available for a range of purposes, including:
A ‘‘farmer credit line’’ for seasonal purchasing needs, with interest at 3.25% over First Trust base level and no arrangement fee.Energy efficiency loan of up to £250,000 for investment in solar, wind, hydro, biomass or any energy saving system, with interest at 3.95% over First Trust base and an arrangement fee of 1% up to a maximum of £750.Young farmer current account with no transactional fees for the first three years. 
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