Farmers challenge AIB executive’s claims over availability of credit

FARMERS yesterday challenged a senior AIB executive’s claim that the bank is willing to lend money to farmers.

AIB head of strategy Michael Dowling told attendees at yesterday’s second day of the Irish Farmers’ Association (IFA) annual general meeting in the Irish Farm Centre in Dublin that credit facilities are available to farmers with strong farm expansion and restocking plans, albeit at higher rates than in previous years.

However, several IFA members said AIB would not provide loan facilities to small groups of farmers, arguing that the bank was far more open to dealing either with individual farmers or companies. Members also queried why interest rates on loans varied inexplicably from one farmer to another.

Carlow IFA member Francis Gorman said: “There needs to be more honesty from the banks in their dealings with farmers. Individual farmers cannot walk in and demand the best rate like Glanbia, but why are some farmers getting more favourable rates than others? We need more transparency.”

This claim was supported by IFA representatives from Cork and Kerry, who added that small farmer groups, who had collectively agreed loans with AIB for over a decade, were now being refused that facility.

Michael Dowling replied: “It is not true that the bank is refusing to deal with groups. That is definitely not a policy of the bank. We invite people to come and inform us of any case in which people feel they have been unfairly refused credit. What I will say is that AIB is open for business with farmers. There is a €250m tranche of funding now available. We suggest that people look for that money now rather than later because we cannot guarantee when there will be another tranche. Whatever happens to any other part of the bank, the retail side of AIB will continue to be a single entity and farming will be a very important part of that.”

Mr Dowling also said that, had farmers borrowed money from the banks early in 2009, they could have retained their own resources to act as a buffer against future challenges. He cited dairy farmers who had built up their businesses during the good times, for the most part from their own resources.

IFA alternative land use chairman JJ Flanagan said: “Farmers have always repaid their debts. The entire farming community owes around €2bn between them. There are individual builders who owe more than that.”

Several members argued that farmers were still unable to gain access to finance, despite Michael Dowling’s insistence that funding was available. JJ Flanagan asked why some farmers were being asked to include an agri adviser’s farm plan with their loan applications.

AIB agriculture strategist Dr Anne Finnegan replied: “We don’t require an agri adviser’s plan, but we do require a farm plan. We accept that farming is traditionally an area that has always been good to repay its debts. The point is that we are now asking different types of questions. It is not that we have a poor view of the farmer’s ability to repay.”