Dairy farmers outside Glanbia can now access a new form of finance with the expansion of the MilkFlex scheme, the lender Finance Ireland, Dutch-based bank Rabobank and Ireland's State-backed Strategic Investment Fund announced this Tuesday.
Farmers can borrow up to €300,000 over eight years under the scheme to finance working capital and productive investments, except the purchase of land. They can also refinance some existing loans.
The Milkflex loans are unsecured and lending decisions are based on the merits of a farmer's business, to be assessed by a specialist agribusiness manager.
The interest rate is variable and currently set at 3.75% above the Euribor monthly reference rate. This is equivalent to 4.18% annual percentage rate (APR).
Flexible repayments
Repayments will be taken directly from the farmers' milk cheques by participating co-ops and fluctuate according to the seasonal milk supply, with no repayments due when most cows are dry between December and March each year.
In addition, farmers will see their repayments adjusted to help them deal with price volatility. If the milk price falls under 28c/l including VAT for three consecutive months, repayments will reduce by 50% for six months. If the milk price falls under 26c/l including VAT for three months, repayments will be suspended for six months. The term of the loan will be extended by up to two years to allow the farmer to repay the reduced amounts at the end of the period.
Repayment flexibility is also built in to help farmers deal with a disease outbreak for six months.
Find more details on the loans and how to access them on www.farmersjournal.ie and in this week's Irish Farmers Journal.