Glanbia launched a loan fund for dairy suppliers on Wednesday, in the presence of European Commissioner for Agriculture Phil Hogan and Minister for Agriculture Simon Coveney. Milkflex is a €100m fund designed to counter volatility by matching repayments with milk price and production patterns.

“We want our supply base to be strong,” said Glanbia CEO Siobhan Talbot, acknowledging scheme partners Finance Ireland, Rabobank and the Ireland Strategic Investment Fund (ISIF).

Farmers can borrow from €25,000 to €300,000 over eight years. Payments will be taken directly from farmers’ milk cheques, scheduled from March to October to match supply patterns. If milk price falls below 28c/l, payments are reduced; below 26c/l, they are suspended. Repayments are increased if prices rise above 34c/l.

€35m of the fund can be for refinancing of existing commitments, with the remainder for new investment. No security is required, other than a signed milk supply agreement for the duration of the loan. Glanbia will write to all milk suppliers in April with scheme details.

There was widespread acclaim for Glanbia’s initiative. Commissioner Hogan described it as groundbreaking, and expressed the hope that it would inspire other processors around Europe. “This will shake up the Irish banking sector and how they deal with dairy farmers,” said Minister Coveney. “It raises the bar for Irish banks,” said IFA chair Jer Bergin. ICMSA President John Comer said: “It demonstrates imagination and understanding.”