DEPARTMENT REPORT ON SHORT-TERM LOANS POSITIVE, BUT IMMEDIATE ACTION REQUIRED ON CASH FLOW SHORTAGES

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DEPARTMENT REPORT ON SHORT-TERM LOANS POSITIVE, BUT IMMEDIATE ACTION REQUIRED ON CASH FLOW SHORTAGES
20 May 2016

DEPARTMENT REPORT ON SHORT-TERM LOANS POSITIVE, BUT IMMEDIATE ACTION REQUIRED ON CASH FLOW SHORTAGES

Dairy, Farm Business & Credit

IFA National Dairy Committee Chairman Sean O’Leary today (Friday) said that he was encouraged that, in announcing the commission of a report on the provision of short-term cash flow loans, Minister for Agriculture Michael Creed and his officials had clearly taken on board the IFA initiative on this issue.

However, he called on Minister Creed to act without delay on the urgency of cash flow stresses on dairy farms, including superlevy deductions from this month’s milk cheque and merchant credit debt.

“The exceptional state aid measures allowing for the provision of those short-term loans to cater for ‘liquidity gaps’, i.e. cash flow shortages were voted on by the EU Council of Agriculture Ministers, on proposal by the EU Commission, over two months ago on 14th March 2016,” Mr O’Leary said.

“There is now real urgency as the majority of dairy farms will find themselves in the red this month simply as a result of milk prices at around 23-25c/l which are below average production costs. Those dairy farmers who have invested in recent years, who just saw the first instalment of their superlevy repayment 2016 leave their milk account, and carry some merchant credit or other bills, will be in even deeper financial trouble,” he warned.

“I call on Minister for Agriculture Michael Creed, who has acknowledged the severe income difficulties being faced by dairy farmers, to fast track the development of the loan scheme required to give effect for Irish farmers to the exceptional state aid measures voted on last March,” he concluded.

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