There is no real competition for farm loans, according to Brian Whelan from Mitchelstown Credit Union.

The comment came during an Irish Farmers Association (IFA) regional meeting held at the Cork Marts in Fermoy on Thursday night 29 August. The meeting discussed farm finance and budgeting following significant cashflow pressures on farms.

AIB, Bank of Ireland (BOI), PTSB and the credit unions made presentations at the meeting for farmers who want to transfer merchant or co-op and contractor debt into structured bank credit.

“There’s not really competition in the sector. When interest rates went up, the banks and credit unions made super, ridiculous profits but [farm] loans still went up.

“If there was real competition in the sector and you were AIB or BOI, making money for doing nothing with the deposit, you wouldn’t then be increasing loans,” Whelan said.

Loan types

The meeting allowed the bank representatives to showcase some of the loan types that are available to farmers.

A growth and sustainability loan scheme approved by the Strategic Banking Corporation of Ireland (SBCI) can be availed of in any of Ireland’s major banks.

Farmers are also eligible for the Ukraine credit guarantee scheme through SBCI approval while most credit unions offer a smaller cultivate loan.

Also responding to the question of competition, Bank of Ireland’s agri manager for Cork, Tipperary, Waterford John Fitzgerald felt that competition for loans is important in order to have a “healthy banking sector.”

“Credit unions might be willing to work on a non-profit basis. I think the country needs profitable, operating and healthy banks with strong balance sheets to be able to support customers.

“There is healthy competition between [the banks], we often cross paths and we’re competing for business.”

Time of approval

A source of concern for many of the farmers that attended the meeting was the time it can take to get approved for a loan and the closure of local branches across the country.

While the credit unions said that they would have a response to a farmer if they are approved within a week, the banks offered the contact details for local agricultural finance representatives who can help with the process.

Speaking at the meeting, dairy farmer Noel Hurley said that by the time it takes for farmers to be approved, it could be too late for some.

“It’s impossible to talk to anyone, it takes months for anything to get across the line,” he said.

“Speaking about a fodder crisis and cashflow problems. The way things are looking, if I ran short of money to buy silage next September, the cattle will be dead by the time I get the money.”

IFA meetings

The IFA will be hosting three more regional meetings in the coming weeks for local farmers to hear from banking representatives.

Meetings will be held in Newpark Hotel, Kilkenny on 2 September, in Bloomfield House Hotel, Mullingar on 9 September and in McWilliam Park Hotel, Claremorris on 11 September.