Dairy Forum Cash Flow Tool Initiative Worthwhile, but Minister Must Deliver Actual, State Aid Backed, Cash Flow Finance
Speaking following yesterday’s first Dairy Forum chaired by Minister for Agriculture Michael Creed, IFA National Dairy Committee Chairman Sean O’Leary said that, while the initiative to provide farmers with stakeholder assistance and training in planning short and medium term cash flow projections is very worthwhile, it is crucial that the Minister would deliver actual low- cost cash flow funding using the recent EU state aid concession, as proposed by IFA.
“Many of us dairy farmers aged over 45 have not had the benefits of financial management education, and in this respect, equipping farmers with better financial planning skills is undoubtedly very important,” Mr O’Leary said.
“However, this must go hand in hand with providing farmers with access to low-cost, flexible cash flow finance that they can secure reasonably readily and, most of all, very promptly. IFA has made very specific proposals in this respect, as EU agreed concessions on state aid have opened the door for the Minister to provide such a cash flow funding scheme, with up to €15,000 of financial cost per farmer being permissible without need for EU vetting,” he said.
“We know that such a loan scheme could be used by farmers to back up their current accumulated cash flow debts, whether due to superlevy, merchant credit or other outstanding bills. We have proposed that low-cost funding could be obtained by the state by securing farmers’ repayments on their peak month milk cheques from 2017/18, when producer margins will have recovered sufficiently,” he said.
“While markets have hopefully started a real recovery, there is a way to go before milk prices come back up enough to even just cover costs. I know the Minister is positively disposed to our proposal, and now we need strong and urgent action to secure this vital cash flow funding,” Sean O’Leary concluded.