UFU uses dairy crisis meeting to call for fresh thinking by banks

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The Ulster Farmers’ Union is using a DARD crisis summit today to call for ‘fresh and radical’ thinking by all banks and other finance houses.

UFU president, Ian Marshall, warned that the crisis went beyond the dairy sector to all of agriculture – and that there was no evidence it would be solved quickly or easily.

“It is becoming more clear every day that there is no magic bullet to solve problems like volatility. We can complain about poor global markets and prices – but as farmers we cannot fix them. What we can do is tackle a financial crisis that is getting deeper by the day – and the solution, in the short term, lies with the banks,” he said.

The UFU says farmers accept that many things need to change, including contracting arrangements to align milk supplies in particular to the market. But it says there is little point in focussing on these long term goals when the challenge is to get farm businesses and farm families through the worst cash crisis in a generation.

“This is affecting not only businesses, but families struggling to make ends meet – and that applies in particular to large, apparently successful farms,” said Mr Marshall.

The UFU wants banks and other lenders to be more open about capital holidays to get through the crisis. In the longer term it wants capital repayments linked to the profitability of the sector the enterprise is in, and it is pressing for a change of approach to how money is lent to agriculture.

“There is no point in giving a six month capital holiday now. We know the problem is not going to be solved in that time, leaving the farmer to go back and ask for another extension. We need to take that pressure off with a two year repayment break. We also need to change funding to a longer term base – more akin to a mortgage than working capital, and with an interest rate that reflects that approach,” he said.

The UFU welcomed the decision by the farm minister, Michelle O’Neill to call the crisis meeting with a focus on the dairy sector, saying that it was clear that only an industry-wide approach involving DARD, the banks and suppliers to agriculture was going to find a way through the current problems.

“If we can achieve financial stability for this year we can then begin to tackle the issue of making sure we can never end up like this again,” said Mr Marshall.