Farm Business & Inputs Council Report April 2021
Activity since last National Council
AIB agreed last month to sell a portfolio of 4,000 deep-in-arrears mortgages to US investment group Apollo with Mars Capital Finance Ireland to service the loans.
The portfolio was sold for a discounted price of €400 million while the total original value of the loans in the portfolio, known as Project Oak, was about €1 billion.
AIB has been issuing a new financial statement form to agri-NPLs in recent months for completion.
IFA has written to AIB CEO Colin Hunt on the matter and is meeting with him later in the month.
A delegation from IFA met with Bank of Ireland head of retail banking, Gavin Kelly, to outline that the decision by the bank to close 88 branches around the country comes as a hammer blow to farmers who will be disadvantaged and disproportionately impacted by it.
The loss of this vital service will discommode those who rely on in-person banking and reduce footfall in affected towns.
Farming and rural communities are disproportionately impacted by these closures since over 80% of branches are located in rural Ireland.
BOI justified the closures with reduced footfall in branches and a noted transition to online banking.
In light of the recent withdrawal of Ulster Bank and Bank of Ireland’s decision to close branches, it’s clear that rural Ireland is now more dependent than ever on the Post Office network.
Bank of Ireland confirmed that it’s in talks with An Post to develop a partnership whereby withdrawal and lodgement services will be available to Bank of Ireland customers in their local post office.
IFA has called on the Government to make the necessary investments in establishing fully-serviced community banking.
IFA met with Ed Sibley, Deputy Governor at the Central Bank to discuss issues surrounding borrowing. Issues discussed included cost of borrowing, lack of competition, payment breaks etc. Ed Sibley agreed that the bank must look at lending ground-up from the borrower’s perspective rather than trying to resolve issues in the banking sector top-down from the lender’s perspective.
IFA has written to ICOS and met with MII calling for the replacement of cheques with Electronic Funds Transfer (EFT).
The Tax Strategy Group Papers are being prepared by the Department in the 1st half of the year and these will inform the Minister for Finance’s decision on which measures are included in the Budget.
The committee is finalising a submission for the Department of Finance highlighting the key tax relief and measures that must be included in Budget 2022.
It will primarily focus on reliefs under the stamp duty code.
- In light of the success of Gary Digney (PIP – Personal Insolvency Practitioner) and Keith Farry BL in obtaining PIAs for several farmers in court, the DSS will advise all DSS-users to meet with a PIP to review the suitability of their case for a PIA.
- IFA met with Minister for Justice Helen McEntee to discuss the reform of the Personal Insolvency Act.
- The Personal Insolvency (Amendment) Bill (No. 1) 2020 is currently at Committee Stage in Seanad Éireann.
- The Bill includes an amendment to remove the need for relevant debt under the Act to have originated prior to January 2015.
- A more comprehensive reform Bill will be published in the second half of the year.
- IFA is pushing for debt secured in or over farmland to be considered relevant debt under the Act.
- IFA will work with the Department on formulating a provision for the same.
- Close monitoring of Ulster Bank as it proceeds towards winding down its operation and the sale of its loan book.
- Monitoring AIB and the sale of a portfolio of loans under Project Oak.
- Upcoming Property Registration Authority seminar on prescriptive easements.
- Reform of the Personal Insolvency Act.
- Submissions to Budget 2022.
Activity since last National Council
Since the committee led a survey in January of fertilisers prices have experience a sharp increase.
In January, merchants were selling SulCAN at €205-220/t. This week prices are up at €240-270/t.
Reasons for the steep rise in prices include supply chain issues caused by Brexit and Covid-19.
Many farmers had forward bought fertiliser before Christmas so are not affected by the increase in input costs.
Increase in price of silage wrap.
The price of silage wrap is expected to increase by €10 to €20 per roll this year as a consequence of limited supply of the raw materials needed by manufacturers.
Rising crude oil prices, aviation remaining grounded and uncertainty caused by Brexit are all contributing to the rise in price.
Expiry review of anti-dumping duties on Russian Ammonium Nitrate
IFA believes that the European Commission’s decision in December to prolong anti-dumping tariffs on Ammonium Nitrate from Russia for another five years has contributed to the recent hike in the price of nitrogen fertilisers.
The Commission has chosen to protect the profitability of European fertiliser producers while farmers face higher input costs.
The European Commission is undermining the competitiveness of EU agriculture and destroying farmers’ incomes by enabling a dysfunctional fertiliser market in the EU.
IFA has persistently campaigned for a fairer market for fertilisers along with its colleagues in COPA by opposing the renewal of anti-dumping measures which prevent the operation of a fair and transparent market.
- Fertiliser prices will be watched closely in the coming months.
|Rose Mary McDonagh|
Farm Business Chair