Farm Business & Inputs Council Report September 2020

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Farm Business & Inputs Council Report September 2020
10 Sep 2020

Farm Business & Inputs Council Report September 2020

Council Reports, Farm Business & Inputs Reports

Activity since last National Council

  • Separate teleconferences with AIB, BOI and Ulster Bank re. supports for farmers impacted by Covid:
    • IFA continues to update banks on current issues and future problems facing agri-sector due to Covid-19, weather, CAP post-2020, interest rates, loan payment breaks, commodity prices and Brexit.
  • July Stimulus Plan
    • Funding for Future Growth Loan Scheme and Covid-19 Credit Guarantee Scheme
    • Employee Wage Subsidy Scheme & Pandemic Unemployment extended
    • Extra year of Income Averaging step-out allowed
    • €50m Beef Support Package
    • Additional allocation for on-farm renewable energy investments under TAMS – €10m
    • Investment in a large-scale habitat restoration project by Coillte – €7m
  • Future Growth Loan Scheme (FGLS)
    • Scheme is now open for applications
    • Loan purpose: long-term and strategic investment to improve overall farm performance
    • €200m ring-fenced for agriculture
    • Interest rates: < €250k: Max 4.5%, >€250k: Max 3.5%
    • The SBCI determines eligibility of the loan purpose and the banks normal credit approval process applies
  • Covid-19 Credit Guarantee Scheme (CCGS) – the details continue to be developed and change constantly. As of today’s date:
    • Expected launch date is early/mid September
    • Fund of €2bn backed by an 80% state guarantee
    • Aimed at businesses impacted by covid-19 to provide working capital/refinancing
    • Hurdle for eligibility: 15% drop in turnover, business must have been in a healthy financial position @ 01.01.20
    • Banks will determine eligibility
    • Loan amount: €10k-€1m, double a business’s wages bill or 25% of turnover.
    • Max Term: 6 years
    • Interest rates similar to or lower than FGLS
  • Personal Insolvency Arrangements (PIA)
    • A recent circuit court judgement permitted farmland to be eligible for a PIA. This sets a new precedent meaning PIAs could be an option for some farmers in arrears. PIAs are a debt resolution mechanism which prevent the sale, surrender or repossession of the property. These arrangements restructure debt by reducing interest rates, extending the clearance period and writing off some liabilities; dependent on the circumstances.

Upcoming issues

  • Budget 2021: Pre-budget doc submitted; Oireachtas Lobbying Event provisionally scheduled for September 16th; lobbying should occur at a local level in the run-up to the Budget.
  • Maintaining pressure on newly formed Government to ensure that the CCGS is made available as soon as possible; with unrestrictive eligibility criteria and facilitating working capital, investment and credit issues.
  • Further meetings with banks to continue to get and provide feedback regarding ongoing finance issues.

Inputs

Activity since last National Council

  • President wrote a letter to all 27 EU commissioners seeking the removal and termination of the anti-dumping duty applied to imports of Ammonium Nitrate (AN) from Russia.
  • IFA Brussels has contacted Commissioner Wojciechowski’s cabinet directly to clarify their position.

Upcoming issues

  • The Commission will determine in the coming weeks whether the anti-dumping measure on AN imports from Russia to the EU are to be renewed.
  • The supply of straw will be impacted by the poor harvest in parts of the country.
Chair Rose Mary McDonagh
Acting Executive Donal Sheehan
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