Banks come under fire as Glanbia launches scheme to support farmers

Speaking at the launch of the GAP scheme on Thursday, Minister for Agriculture Michael Creed said cashflow and the cost of credit in the farming community is not what it should be, and that Glanbia “continue to be a trailblazer” in that regard.

“We do not have an effective, functioning, competitive banking market, and what I would like to see out of this initiative is, hopefully, a competitive pressure being applied, particularly to the pillar banks, to step up to the plate. The cost of credit is too high, and it doesn’t stack up in the context of interest rates being charged across Europe.

“In the Department we are exploring all opportunities, and we will be meeting with the pillar banks in a couple of weeks, individually, to impress upon them the necessity to display forbearance as they deal with individual farmers.

“The GAP initiative today is a further indication that Glanbia continue to be a trailblazer in this regard, and I commend them and their management team for that. I do hope that it is a template that others will follow,” he said.

The minister said that a range of instruments and policies was needed to get through this difficult period, and that he will be working with both the dairy processing sector and the farm organisations to ensure that, collectively, the industry is in a position to capitalise when the markets recover.

“When will they recover? We don’t know. But they will recover, and the objective is to ensure that the industry comes through, and we are unscathed in our positions to capitalise,” he said.

Minister Creed was also critical of the banks in the video released by Glanbia to promote the GAP scheme:

Cost effective

The Irish Co-operative Organisation Society (ICOS) welcomed the initiative by Glanbia, describing the scheme as a cost-effective and innovative cashflow management tool.

Seamus O’Donohoe, CEO of ICOS, said that co-operatives had been to the fore in developing an array of cashflow tools varying from direct price support from co-op balance sheets and fixed price contracts to offering extended credit terms and loan facilities to members.

“At a time when credit costs to Irish farmers from our banking system seemed disproportionately high relative to their European counterparts, this measure will help to at least dampen the most extreme effects of cashflow pressures,” he said.

Genuine efforts

Meanwhile, the Irish Cattle and Sheep Association (ICSA) has passed a motion of support for farmers suffering the consequences of financial debt at their national executive meeting in Portlaoise on Thursday.

The motion states that “ICSA supports the principle that any farmer making a genuine effort to deal with their indebtedness, should not face eviction from their family farm”.

ICSA rural development chair Seamus Sherlock said that the repossession of family farms not only takes away the land, and the family home but often removes the only source of family income.

“This course of action benefits no one, and often State agencies are left to pick up the pieces. These include financial support, health support and often psychological support.

“We are dealing with a legacy whereby farmers who may have received bad financial advice in the past are now dealing with the consequences. Farming families must be given the opportunity to manage their debt over a longer period of time if necessary. As custodians of the land, sometimes spanning generations, ICSA stands with those farmers making genuine efforts to meet their commitments and we believe they should be facilitated,” Sherlock said.

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