Irish farmers are being ripped-off by Irish banks on interest rates compared with their European counterparts, according to ICMSA president Pat McCormack.

McCormack has criticised what he termed the “deafening silence” from the Government and the regulators on the question of the excessive interest rates being charged by Irish banks, particularly the interest rates being charged by banks on loans to their farmer customers.

McCormack has looked at the rates being paid by mainland EU farmers compared with Irish farmers through his board position on the European Milk Board and he has said the differences are jaw-dropping.

German farmers, for instance, have interest rates of between 1% and 1.8% and in France, the interest rates paid vary between 2% and 2.8%, which the ICMSA president said is substantially lower than what Irish banks customarily charge.

In Denmark, the rates – including an administration charge – might amount to 3%, with Belgium coming in at less than that, he said.

“We estimate that a farmer with a loan of €80,000 over a five-year term will pay over €6,500 more than their German counterpart borrowing the same amount over the same term. The only appropriate word for this is ‘pillaging’ and it’s long past the time when someone in authority asked our regulatory agencies for an explanation.

“Unfortunately, we have here the old story where we know for an absolute fact that we are being ‘ripped off’ by our Irish banks who are charging over double the interest rates that the French and German banks charge while still making a healthy profit,” he said.

The ICMSA president continued that farm loans are probably a bank’s dream business in that they are usually fully secured against the farm itself and so completely collateralised, on any logical basis that would make farm loans cheaper because there’s less risk of defaulting.

“At what stage will the Government and its regulators actually do something about the officially sanctioned pillaging of the Irish people by their banks through comparatively penal interest rates?” McCormack asked.