Dr. Ailish Byrne:

I thank the Chairman and committee members for the invitation to address the joint committee. I am the senior agricultural manager in Ulster Bank. I am joined by my colleague, Mr. Nigel Walsh, head of sectors and specialist business. I have worked in Ulster Bank for over ten years, in the agriculture sector, and have a PhD in farm financial management which I completed under the guidance of Teagasc in the school of agriculture in UCD. I also farm actively in the Carlow area.

At Ulster Bank we believe the imminent removal of dairy quotas represents a major and long-term opportunity for efficiently managed grass based family dairy farms. However, we also realise that dairy market returns and, by extension, farm gate milk prices have become more volatile in recent years. The Ulster Bank strategy for the dairy sector is reflective of these issues. Ulster Bank is lending to the farming sector and provides support for its customers in periods of volatility. It provides banking services for one in every five farmers and approximately 25% of young trained farmers. We have a team of 30 agri-specialists, based in agriculture communities and the Ulster Bank credit department. These specialists are supported by our central agri-team which consists of Dr. Anne-Marie Butler and me.

In 2014 we launched our inaugural advance agri-accreditation course, which is accredited by the chartered banker programme and was developed by Dr. Anne-Marie Butler, previously a lecturer in the school of agriculture in UCD. This advanced agri-accreditation course supplements our annual agri-training courses which are completed by approximately 150 of our colleagues each year. Our accredited agri-specialists typically come from farming backgrounds and have completed various agri-qualifications. They have the necessary expertise and insight to support farmers in their day-to-day financial affairs. Also, our agricultural managers are available to meet farmers on their farms at times that suit our customers.

Ulster Bank has a range of products tailored specifically to the needs of farmers. For example, in October 2013 we launched the Ulster Bank dairy expansion loan to support the growth plans of dairy farmers. This loan provides an interest only option of 24 months to cover the natural timelag between on-farm investment and the generation of additional cashflow. We also have a competitive offering for young trained farmers which provides unsecured loans of up to €30,000. Also, this year we launched the Ulster Bank pasture loan. We believe the profitability of farms is intrinsically linked with the production and utilisation of grazed grass. Therefore, this pasture loan can be used by farmers to invest in soil fertility and reseeding activities and providing paddocks and waterways on farms.

Ulster Bank has extensive two-way engagement with all key stakeholders and influencers in the agri-sector, including dairy processors, farm organisations, advisory bodies and farm consultants. The bank also participated in the Department's and Bord Bia's trade missions to China in 2012 and 2014.

I highlight an event organised by Ulster Bank in 2014 to support the growth plans of dairy farmers, an event which focused, in particular, on the young farmer sector. We held a young farmer seminar, to which we invited 50 young farmers who were considering entering the dairying sector. We had a panel discussion with a number of experienced dairy farmers who had had expanded their businesses in the previous ten years. The panel also consisted of a number of pig farmers with experience of working in a volatile business. We used this discussion to highlight for young farmers the challenges and risks they might encounter if they started or expanded in the dairy farming sector. We also used the opportunity to educate young farmers on the importance of embedding financial management techniques in their businesses.

As we work hand in hand with our dairy farming customers and the wider industry, we realised in 2014 that dairy farmers might face some financial challenges in 2015, owing to a low milk price, perhaps a superlevy fine and possibly a large tax bill. All of these issues arise at a time of expansion on farms. Therefore, we have taken a proactive approach to providing support for our dairy farmer customers in 2015 and developed the Ulster Bank dairy farmer tool kit. This tool kit will provide solutions for farmers on a case by case basis and can include options such as increased working capital facilities, a capital repayment holiday or an interest only option, or a combination of both, depending on individual circumstances. However, to avail of any of these options, we strongly encourage farmers to complete a capital budget and know their cost of production.

I thank the Chairman and committee members for affording me the opportunity to address the committee. My colleague and I will be happy to address questions members may have for us.