Phil Hogan highlights MilkFlex-type funds

Traditional bank lending institutions have failed to understand the nature of the agri-food sector and its enormous potential for growth and profitability.

European Agriculture Commisioner Phil Hogan made the claim at the general assembly in Brussels of CEJA, the European Council of Young Farmers, headed by former Macra na Feirme president Alan Jagoe from Carrigaline.

Noting that other players are “taking the bull by the horns,” Mr Hogan referred to the innovative MilkFlex Fund in Ireland.

“This lending instrument will offer flexible, competitively priced loans to milk suppliers in the Glanbia co-operative. Loan repayments will vary according to milk price movements.

“To the best of my knowledge, this is the first European fund of its kind to offer farmers access to the type of finance they need,” he said.

Mr Hogan said MilkFlex is a completely new type of loan product, with a multi-partner, thinking-outside-the-box approach.

The key financial innovation is that the collateral is the milk cheque, not the farm or family home, allowing new entrants to access finance even when leasing land.

Investing in young farmers makes sense.