Coveney asks banks to give farmers leeway on credit

Banks have been requested by Agriculture Minister Simon Coveney to take a flexible approach towards extending credit to their farmer customers, arising from recent weather-related difficulties.

In a written reply to a Dáil question by Fianna Fáil TD John McGuinness he said he was acutely aware that some farmers may be having short-term difficulties in managing their borrowings.

Along with his officials, he said he was in regular contact with farm bodies, national banks and the Irish Banking Federation concerning credit and indebtedness matters relating to farmers.

“The banks have responded to my call for understanding and flexibility and indeed have issued advertisements in national media telling farmers that they are willing to provide short-term facilities to deal with the feed issues,” he said.

Mr Coveney said in terms of the medium-term trends of indebtedness in agriculture, Central Bank data indicates that the total stock of farm borrowing has been largely stable since the end of 2011.

It had fallen by €1bn from its peak of €5.2bn in early 2009 to its current level of approximately €4.2bn. This recent reduction and subsequent stabilisation of indebtedness was positive.

But it was also important to highlight that financial indebtedness can also be alleviated by improved productivity, enhanced skills and higher prices. Mr Coveney said he will continue to meet regularly with relevant parties, including the Banking Federation. He said he will continue to impress upon the lenders the importance of being proactive and flexible with the farming sector in addressing credit-related matters.