ICMSA members told low interest 15-year loans for farmers ‘in pipeline’

Farmers may be able to avail of low-interest 15-year loans backed by the European Investment Bank by mid-2016, ICMSA members have heard at its AGM in Limerick.

In a week dominated by salary issues at its IFA rivals, the ICMSA event also featured news of a possible softening in the Russian embargo on EU food imports, and talk that EU may support food producers in their battles with retailers.

Agriculture Minister Simon Coveney and EU agriculture commissioner Phil Hogan told the ICMSA’s members that market indicators pointed to an improvement in the milk price towards the end of 2016. Both would continue to seek EU supports such as storage aid and measures to improve volatility controls.

They also told dairy farmers the proposed EIB loans would give farmers more competitive options than those available with the two main Irish commercial banks.

Mr Hogan said: “I want to make it possible for people to have access to 15-year or even 20-year money rather than the present three-year loan arrangements.”

Dairy farmer Lorcan McCabe said farmers are paying 4.5% or 5% interest on loans versus the 0.5% being paid by farmers in Austria.

“Irish farmers are paying too much to banks in terms of interest rates on short term loans,” said Mr Coveney.

“We are trying to intervene. The banks see farmers as a good bet.”

As to why fertiliser prices have stayed stubbornly high despite falling fuel costs, Mr Hogan urged farmer groups to gather any data indicative of a cartel among fertiliser companies. He said the EU has been successful in stamping out anti-competitive practices in the past.

Mr Hogan also offered some support for ICMSA calls for EU measures to ensure greater fairness in the food supply chain, a matter which is up for review in 2016.

IMCSA president John Comer said the farm gate milk price has fallen up to 40%, while EU retail prices have only fallen by 2% this year.

Mr Comer said: “Whenever the supply situation permits them, retailers just wipe out the margins of everyone behind them all the way back to the cow. And they’re allowed to do it.

“No-one seems to find anything wrong with this grotesque abuse of their dominance. Control of indigen-ous EU food production has got to be taken back from the greedy clutches of multinational retail corporations.”

Mr Comer welcomed Mr Hogan’s commitments to address the multiple retailer power. He said retailers would use their dominant position to sell below-cost vegetables over Christmas. He called for a floor of 28c per litre payable to milk producers, noting the current 24cpl price from processors is below the cost of prodction.

However, while very much a side issue on the day, the ICMSA did address the controversy on salary scales at the IFA. While the ICMSA’s annual wage bill for its 11 Limerick staff comes to about €577,000, members still called for transparency.