Bank of Ireland is taking a “prudent” approach to lending to farmers who may face tougher environmental rules in the future, the bank’s head of agri Eoin Lowry has said.

The lender was conscious of the 250kg N/ha stocking rate limit for derogation farmers “coming under pressure”, and has been advising affected farmer customers of their options to comply with the new 220kg N/ha limit, Lowry told the Irish Farmers Journal.

He explained that these options include sending replacement heifers off for contract-rearing, looking at slurry exports and sourcing additional land, with a cut to numbers not the only tool available to farmers to reduce stocking rates.


However, the absence of certainty on the future of the derogation has left farmers in the dark on planning for the medium and long term, leaving the lender with a prudent view of the business planning behind loan applications.

“Look, there is very little clarity on what will happen beyond the 220 [kg N/ha] that we have now in place, and I suppose that is the difficult situation that our customers and farmers are facing,” Lowry said.

“They are operating in a fog because of that lack of clarity around the policy. Farmers are making decisions on their farms today, in many cases for the next 15 or 20 years, such as buying land or investing significantly in concrete on their farms, and they don’t know what is going to happen beyond 2025. That is a precarious situation to be in.

“From a banking perspective, we are taking a very prudent view. We are explaining that situation to our farming customers so they understand the implications, because we don’t want to set a farmer up with loans that they won’t be able to meet if there are further reductions around the derogation and the stocking rates they can carry on their farms.”

Cut only crystallising now

AIB’s head of agriculture Donal Whelton also reported seeing a “significant increase in demand for land” among farmers.

On the derogation cut, he said: “I think it is probably only just crystallising, and farmers are only looking at their options now.”

“Obviously, we knew this review had started in 2022 and farmers were hearing that – obviously there was a lot of resistance from farming organisations to the drop to 220; maybe they had in their own heads that this wasn’t going to happen.”

However, farmers in the dairy and tillage sectors looking to borrow and invest should not be fearful of a poor year of prices leading to a loan application being refused, according to Whelton.

“From our point of view, we take that [volatility] into account when we are making any long-term loan decisions, so we don’t take a knee-jerk reaction when prices are low, but we also don’t get too excited when output prices are very, very good,” he added.

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