The Irish Farmers' Association (IFA) met with AIB and Bank of Ireland (BOI) on Thursday to examine the options facing dairy farmers facing cashflow issues.
Following the substantial drop in milk prices, an IFA delegation met with the banks as part of a plan developed by the IFA national dairy committee.
IFA dairy chair Stephen Arthur said both banks advised that farmers should get in touch early if they think they might need cashflow support for their businesses.
“Farmers should recognise, quantify and communicate their needs to their bank sooner rather than later was the advice,” he said.
The IFA highlighted that a suite of options is available to farmers, including loans for capital expenditure already carried out, stocking loans and short-term working capital facilities to fund tax or other farm expenses.
Other options include interest-only repayments, the extension of overdraft facilities and, in certain cases, an extension of loan terms.
IFA liquid milk chair Keith O’Boyle said it’s vital that farmers spend time looking at all the options, as the terms and interest rates applicable vary considerably.
“A knee-jerk reaction would be to request an extension to overdraft facilities, but that is the most expensive form of credit. Farmers need to sit down now and do a cashflow forecast into next year to enable them to assess their individual situation,” he said.
The IFA said that it plans to meet other financial providers in the short term and will issue a guidance document to its members on all options available.