Dr. Ailish Byrne:

I appreciate the opportunity to update once again the Chairman and members of the joint committee. The removal of milk quotas represented a major and long-term opportunity for efficiently managed, grass-based, family dairy farms. The increased output will be exported and demand will be driven by changing global demographics, reflecting increasing population, greater affluence and urbanisation in developing countries. However, we also accept that the abolition of milk quotas brings challenges, especially in terms of milk price volatility and the requirement for additional investment in farm infrastructure to facilitate expansion. Ulster Bank sponsored the Teagasc Moorepark open day in July which provided dairy farmers with an opportunity to view and discuss the latest developments in key dairying technologies to help them to tackle these challenges. These factors are firmly embedded into the Ulster Bank business and credit strategy for the dairy sector.

Ulster Bank continues to lend to the dairy sector for on-farm development and expansion, as well as providing support for our customers in this period of low milk prices. We have skilled managers who understand farming and offer a range of products to support our agri-customers, including a dairy expansion loan, a pasture loan and a young farmer package.

Our agri-training programme is accredited by Chartered Banker and 40 of our relationship managers have completed this course. As part of their training, this group participated in a farm safety training day at Teagasc during April. These specialists are supported by our central agri-team. Despite various financial pressure points in the past, including the dairy sector downturn in 2009, the fodder crises of 2012 and 2013 and various downturns in the pig sector, the Ulster Bank experience with the agri-sector has been positive.

The welcome measures introduced in budgets 2015 and 2016 encourage land mobility and better access to land for active farmers. The farm sector should embrace these measures. Our support for these measures was highlighted in the Ulster Bank and Teagasc publication, Stepping Stones to a Career in Dairy Farming, earlier this year. A copy of this publication was provided for the clerk to the committee for circulation to all members. The publication highlights the changing landscape facing Irish dairy producers as they seek to compete successfully on a global stage, while exploring the emerging career pathways available to them, for example, farm partnerships, share-farming and other collaborative farming arrangements.

We believe dairy farmers need to continue to develop a broader range of skills. Greater understanding of technical efficiency, people management and business skills are required to successfully develop farming operations in this increasingly uncertain environment. This morning I was at Ulster Bank's third young farmer seminar entitled, Embracing Change in Meath, which was attended by more than 60 young farmers. This seminar, with similar events last week in Cork and Sligo, focused on encouraging young farmers to focus on the skills necessary to develop and grow their businesses. Our expert panel of dairy and pig farmers who had expanded their businesses in the previous ten years provided key insights into market volatilities, challenges and risks young farmers might encounter as they expand their businesses.

The role of women in the family farm business is often under-estimated. This Thursday evening Ulster Bank will host a women in agriculture event in Mullingar which, among other things, will promote wellbeing and mental health issues for farm families, particularly in times of income pressure.

Through our close relationship with all stakeholoders in the dairy industry, we realised last year that dairy farmers might face some financial challenges in 2015 due to a low milk price, a superlevy fine and, possibly, a larger than normal tax bill. This coincided with a time when many dairy farmers were expanding their activities. We developed the Ulster Bank dairy farmer toolkit as part of our proactive support for dairy farming customers. The toolkit provides solutions for farmers, with options such as increased working capital facilities, an interest-only option or a combination of both, depending on individual circumstances.

We encourage all our farmers to analyse their cost of production per litre of milk and to prepare a cash flow budget. We actively make care calls to our dairy farming customers to outline the support we can provide if they are in difficulties. We are currently encouraging our dairy farming customers to apply for additional support now in anticipation of a below-cost production price for milk next spring. As part of our efforts to ensure that farmers are kept informed on relevant issues, yesterday we had an article in The Examinerencouraging farmers to prepare cashflow budgets and seek assistance from their bank now in anticipation of a low milk price next spring.

We welcome the establishment of the dairy forum by the Minister for Agriculture, Food and the Marine. It has the responsibility to provide recommendations to farmers on how best to deal with future price volatility and as active participants we are helping to drive this agenda.

I reiterate that Ulster Bank is very active in and committed to the agrifood and farming sectors. Our aim is to partner our farming businesses and to play our part in addressing the difficulties arising from volatility in the dairy market. We have developed a flexible approach for our customers in difficulty with our dairy farmer toolkit and look forward to further engagement, particularly through the dairy forum, with other stakeholders to consider the range of options to address the fundamental difficulties facing the sector.

I thank the Chairman and the members for affording Ulster Bank the opportunity to address the committee. Mr. Eddie Cullen and I are happy to address any questions members may have.