IFA Farm Business Chairman, Tom Doyle said that the interest rates being charged by some merchants on farm debtor accounts are excessive and are bordering on extortionate.
Mr Doyle said, “Initial findings from an on-going IFA merchant interest rate survey show that rates in excess of 20% APR are being charged when clearly these agri-businesses are capable of borrowing at rates in single digit territory. Some members of the trade are taking advantage of the current situation in what has been one of the longest and most expensive winters in living memory for livestock farmers, many of whom are facing in-ordinate feed bills. The trade must immediately cut interest rates and extend credit terms to help farmers through the current fodder crisis.”
“IFA will continue to monitor the situation closely and will be publishing a nationwide merchant interest rate survey in the coming weeks. Farmers need to be more vigilant when availing of merchant credit and ideally should use cheaper bank loans to pay for the goods before the interest free period expires. Farmers should also insist that accounts are cleared to a specific point rather than making repeated on account payments with no credits accruing.”
Mr Doyle concluded, “I have again made contact with the banks to urge them to renew their support for farmers during this difficult time. This includes extending working capital to farmers and the agri-supply sector, communicating early with customers under pressure, providing flexible and affordable restructuring options to relieve pressure on incomes and converting high-cost merchant credit into a longer term, more sustainable, bank loan”.