Many farmers around the world would gladly swap places with the four in five who told the Irish Examiner ICMSA farming survey they do not feel their farm debt is excessive.
It’s one of the competitive advantages of farmers in Ireland that their debt levels are low compared to dairy farmers in Europe or elsewhere.
For example, our dairy farmers are relatively well placed, debt-wise, to make investments for expansion.
When the statement “My level of farm debt is too high” was put to the 569 farmers in the survey, 62% disagreed, 19% neither agreed nor disagreed, and agreed or strongly agreed with the statement.
Over-65s and small farmers seem the least worried by their debts.
Only 8% of farmers with under 40 acres, and 11% of the older farmers, said their debt was too high.
Irish farmers have only to look overseas for valuable lessons on the dangers of debt in their economically volatile business.
Dairy farmers here are the most likely farmer category to borrow, but the average debt level per cow in Ireland is estimated at only656, compared to Denmark’s 11,918, at the other end of the EU scale. In between are the Netherlands is 8,394 per cow, and the UK and France ranging from 1,600 to 2,300.
The slippery slope to increasing indebtedness is evident next door in the UK, where one of the banks, Lloyds, has set up a £500m emergency fund to help struggling British farmers.
The farmers are trying to cope with falling prices for their produce, especially milk, but it is delay in paying EU subsidies that has prompted the bank to step in.
Not for the firest time. UK payment agencies have bungled payments, this time getting the transition from the old subsidy payment system to a new digital process wrong.
Irish farmers also know they are much better placed than New Zealand’s dairy farmers, for whom the global milk price slump comes at the worst possible time, having trebled their debt load to $34.5 billion in the past 10 years
About 11% of this debt is held by farmers with negative cash flow and high debt levels.
In France, about 22,000 farms are on the brink of bankruptcy, with a combined debt of one billion euros.
They too would gladly change places with Irish farmers.
But it is in the less developed farming economy of countries like India that farmer indebtedness is most tragic. El Nino-related drought has hit India, bringing rural indebtedness to its highest ever level.
In Marathwada, one of the five regions in the state of Maharashtra, drought has pushed more than 1,000 indebted farmers to suicide since January.
© Irish Examiner Ltd. All rights reserved