“Put it on the account.” Something many of us have said at the trade counter when buying feed or fertiliser, or any of range of goods needed for the farm.

A trade account at your supplier certainly has many benefits, such as ease of doing business and usually an allowance of a 30-day period to make payment in full without suffering any extra interest costs or other fees.

However, once you get past that 30-day period, the costs can soon start to rapidly add up and, unless managed, can quickly become significant.

Interest charge

Looking at co-operative suppliers, there is generally a fixed interest charge added monthly. Dairygold currently charges 1% per month after the first month, while Tirlán charges 2% per month after the first month.

Aurivo splits them down the middle with 1.5% per month.

For comparison, we also included the costs of an unsecured bank loan (Figure 1).

We used the Bank of Ireland unsecured business loan rate, which is currently 7.05%, as our benchmark rate – other banks have other rates in the same ballpark, so be sure to shop around if you are looking for credit, as there are often offers available and products specifically aimed at farmers, which can be even cheaper.

Taking those numbers, and purely for illustrative purposes, we looked at how much of an interest cost €1,000 of spending would attract over a full year (see Figure 1).

One month free, then 11 months at 1% per month, means an interest cost of €115; at 1.5% per month means €177; and at 2% means €243 for the year. The bank loan would cost €70.50.

It is worth noting that the bank loan also works out as cheaper on shorter terms.

It is only when you pay back your credit within the first 30 days that trade credit generally works out as the cheapest option, because as we said earlier, in that case, the cost is usually zero.

The 2% per month rate works out as an annual 26.8%. So in that case, it would even work out cheaper to buy your goods on your credit card!

Outside of the co-op sector, other merchants often have a floating monthly interest charge, which is set off a bank lending rate plus a fixed percentage, so in those cases too, a bank loan would be the more economic option.


Generally in Ireland, all lending to consumers falls under the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act of 2022, and the Consumer Credit Act of 1995 – amended in 2022 – which all aim to strengthen the protections available to, and reduce the cost of credit for, consumers.

The Central Bank is the regulator for consumer credit in Ireland. However, the act which governs consumer credit has a specific carve out for trade credit, such as that given over the counter when buying fertiliser.

The act does not view a firm which only provides trade credit – where both the buyer and seller “is acting in the course of his or her business, trade or profession” – as a retail credit firm, and therefore there’s no obligation on the Central Bank to regulate them.

Fundamentally, credit received over the counter by farmers is mostly unregulated.


There’s no better deal when buying what you need for your farm than getting it on account from your trade supplier, so long as you pay everything within the 30-day interest-free period.

But once you go beyond that, there’s no worse deal than buying an account from your trade supplier.

The uneven nature of earnings in farm enterprises, particularly livestock and tillage, where income can be concentrated to only a couple of times during the year, means that proper credit management is a critical money-saving tool.

If you don’t have cash on hand and know that you’ll be waiting to have funds to pay for your purchases, be sure to stop off at your local bank or credit union before going any where close to the trade counter at your supplier.