Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I thank the various banks and the Banking and Payments Federation of Ireland for their presentations. Having listened carefully to the three presentations I am surprised that the garden is in full bloom and there is no sign of a wilt in the roses. As one who keeps in close contact with those on the ground, the presentations were at variance with my experience of what farmers are encountering. How are the witnesses dealing with young farmers who are becoming part of the new expansionary wave and availing of those tax incentives for farm transfers from fathers, uncles or aunts to young farmers? Are they being given two or three years of interest-free loans, interest only loans or any special rates? They are coming into a challenging global environment. Price volatility will continue to be a normal cyclical phenomenon. The days of demand and supply and the days of linear increases are virtually a thing of the past. How do the witnesses deal with those issues where there are significant trough and valley periods? For existing farmers are the witnesses prepared to extend facilities without penalties to ensure they are not being penalised?

At what rate do the banks borrow money? It is important to know the mark-up on the money they are getting, particularly in the context of people in a significant adverse environment in terms of market opportunities. A couple of the banks have different rates, one has 28 cent and one has 26 cent in terms of budgeting. How critical are the rates? The average was 38 cent in 2014 at peak and it dropped to an average of 25 cent. If the witnesses are budgeting for 28 cent and only get 25 cent, how do they handle that situation? Rates of 4% to 4.5% were mentioned. I acknowledge that in terms of merchant credit that is very competitive and is a very attractive price. I salute AIB on its message to encourage farmers to focus on being "Better Before Bigger". That was very prescient. AIB mentioned that on the last occasion and it stuck in my mind. If the dairy industry wants to expand it is important that it gets the best returns by way of increased output and efficiencies before embarking upon the path of expansion. I think that is what that means if I understood it correctly.

Ulster Bank mentioned pasture loans. Are those available across all the sectors? Have any of the banks had to reschedule loans so far? It is good that the banks are meeting the people. That is pre-emptive and I salute them for that. When they do a good job they are entitled to be saluted. We are also entitled to raise questions. Has the rescheduling of loans been part of their suite of solutions? I hope there is no problem and that the 4.5% interest rate does not become 4.55%. Those things are very important because 0.5% could be the straw that will pull one down. Bank of Ireland has developed a suite of products called AgriFlex. Perhaps the witnesses would explain if that accommodates loan holidays and such like, which is very important.

I have great faith in Ornua because it set out the position very clearly for us seven or eight months ago and did so again today. The witness stated that it could be the third quarter of 2016 before the sector starts to come back. Let us send out a clear message before anybody is misled. It could be the third quarter before the smallest shoots begin to appear. I know Senator Pat O'Neill is a dairy farmer so there is no use in getting excited.

Our focus has to be on the comparative advantages in terms of grass based production. This is a perfect storm in many ways. We had the global challenge, the contraction of the milk price and volatility which will continue to be part of the equation. We had the super levy fines and the taxation issue in October or November which led to ROS. Have the witnesses - this question is for each delegation - devised any package to accommodate the farming public and the self-employed in terms of how to deal with those situations? Again, I would be interested to hear the interest rate that would be applied to that type of accommodation, which is essential to ensure farmers continue in business.

I am interested to hear what the delegations have done for the young farmers who are coming directly on stream. We are promoting the acceleration of transfer of ownership to young farmers. Only about 7% of farmers are under the age of 35 years. What can the banks do to accelerate that process, allied to the taxation and other measures outlined in the budget?