Irish farmers paying a “crippling” 3% more than European counterparts on farm loans & financing

ICMSA Farm Business Committee Chairperson, Pat O’Brien, is urging financial institutions to reduce interest rates for farmers as crippling rates are disincentivising investment and threatening generational renewal.  The Farm Business Chairperson said that Irish farmers are often being charged up to 3% more for finance by Irish pillar banks than their continental counterparts, despite the sector’s positive repayment record.

Mr. O’Brien said that while Irish farmers are competing at European market scale for their produce, they often don’t have access to typical European rates for borrowings and are stuck paying rates not on par with other countries. Mr. O’Brien described it as frustrating for Irish farmers to see their European counterparts paying interest rates of between 3.25% and 5.5% in Spain for example, and 3.5% to 4% in France.  A recent ICMSA members’ survey showed that over 45% of participants are paying between 5% and 6% of an average interest rate on farm debt, while over 12% are paying between 7% and 8%.

Generational renewal is one of the biggest threats to the future of Ireland’s agriculture sector and Mr. O’Brien said that a key issue that farmers are repeatedly raising with the ICMSA is the rates of interest being charged on loans by banks and how it is impacting on their ability to invest in their farms.   The ECB has implemented reductions in interest rates in recent months however this has done little to improve Irish farmers’ positions in accessing affordable loans.  

“Young farmers – like all farmers – are keen to invest in their enterprises and start their careers in the best possible position financially, but it is very difficult for them to do so if they are struggling to get approved for finance and, when they do get approval, they face interest rates of anything up to 6% and beyond,” Mr. O’Brien said.

“It is also an issue that farmers over the last number of years – due to the impact of weather and geopolitical events – have needed speedy access to finance, however the turnaround from when they first get in touch with the bank and receive the monies is far too lengthy and onerous a process”, said the ICMSA Committee Chairperson.

ICMSA is meeting with pillar banks in the coming weeks to relay farmer concerns on a number of issues including the need for competitive interest rates to be applied, and also the need for speeder decision-making and approval by banks.  

“We do encourage farmers who are seeking finance to engage with banks as early as possible and to shop around for better rates that may be available to them. Banks should be supporting farming and the way to do that is through competitive interest rates. If they (the banks) can’t or won’t do that, then the relevant state authorities need to intervene and ensure that real competition is brought back into Irish banking”, he concluded.

Ends    4 March 2025

Pat O’Brien, 087-4904424

Chairperson, ICMSA Farm Business Committee

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office