Farmers should consider the "particularly attractive" low-cost loan scheme which was announced by the Government this week, Irish Creamery and Milk Suppliers Association (ICMSA) has said.

With an interest rate of 3.75% on loans up to €250,000, chair of ICMSA’s farm business committee Shane O’Loughlin said that farmers looking for funding for their farm business should consider the COVID-19 Loan Scheme (CLS) announced on Monday by ministers Varadkar, Donohoe and McConalogue.

"Loans of between €25,000 and €1.5m are available, with up to €500,000 available on an unsecured basis, and a very significant number of farmers are in the market for funding for liquidity and investment purposes," O'Loughlin said.

The interest rate available under this loan scheme, he said, is particularly attractive at present and applications will be considered for working capital, investment and also an element of restructuring.

"[The] ICMSA thinks that farmers currently considering funding options should seriously look at this with details available on," he said.

The scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI), through participating lenders.


On the broader question of competitive farm financing, O’Loughlin said that the announcement is a tacit recognition by the Government that the farm finance options being offered by commercial lenders were "overly expensive" and this loan scheme will set a benchmark for farmers and other SMEs.

"It’s noteworthy that the official announcement makes reference to the fact that the finance available on these loans is 'competitively priced' and it very definitely is by comparison with what our commercial lenders are quoting Irish farmers.

"The much bigger question which [the] ICMSA has raised repeatedly with everyone from the Central Bank downwards is why 'competitively priced' farm finance is only available through these special State-backed arrangements," he said.


O'Loughlin also questioned why commercial banks and lenders in Ireland offer farm loans and finance that are much more expensive than their continental counterparts.

"We’ve asked this for a decade and have never received a meaningful answer.

"The Government is aware of this surcharge because their own financing makes direct reference to the fact that it is ‘competitively priced’ by comparison with our banks.

"Maybe the Government could ask the banks why they charge so much by comparison to continental banks," O’Loughlin said.