ICMSA hosted the Strategic Banking Corporation of Ireland (SBCI) at John Feely House last Friday for a discussion on SBCI’s drive to become a significant source of finance and loans in the farm and agri-food sector. Against the background of the present pressures on dairy farmers, ICMSA Farm Business Chairperson, Lorcan McCabe, said it is absolutely essential that there is more competition for the pillar banks and SCBI’s role certainly has the potential to develop more financing options for farmers. The bank’s CEO, Nick Ashmore, and Head of Products, John Madigan, told the ICMSA delegation that the bank was eager and committed to support and invest in the farming and agri-business sector and were, in the words of Mr Ashmore “willing to work with anyone that would work with them”.
In the context of the substantial drop in milk price, serious pressures are building on some farms and loans products linked to the level of milk price certainly have the potential to ease the pressures on farmers. Co-ops need to become more proactive in this regard and follow the Glanbia example of Milkflex with SCBI expressing a willingness to work with Co-ops in this specific area. Mr McCabe welcomed the progress to date made by the SCBI. “For too long, farmers have been starved of choice for bank loans and have paid excessive interest and other charges to banks. Thankfully, it would now appear that there are now more options available to farmers and the very first thing that will attract farmers is the question of interest rates: Irish farm finance and loans are being offered at rates often in excess of a full 2% higher than the rates available to our continental mainland counterparts and anything that begins to lower our rates to something equivalent to our EU counterparts is to be hugely welcomed”, he said.
ICMSA also raised the issue of security – specifically the costs associated with engaging at least two solicitors – and the impact this has in allowing farmers to switch banks. If farmers are to benefit from competition, this unacceptable and costly barrier to switching must be addressed and ICMSA asked SBCI to examine possible alternatives to minimise this barrier to competition.
Ends 29 April 2016.