Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

Any notion that there will not be a huge demand for working capital over the next 12 months can be dismissed. There will be significant demand. I would argue very strongly that in the majority of cases the farmers who received low-cost loans after the 2016 budget did not get the length of time for repayment they sought. A maximum of six years was allowed under the scheme but there was a concentrated effort to reduce the term of the loans. Nothing will convince me otherwise because I have met numerous farmers who have been put under pressure to reduce the length of time to repay the loan they received under the scheme.

The MilkFlex loan scheme introduced several months ago can be obtained for an eight to ten year period but it includes the condition that the recipient must have been in milk production for more than one year. In the past two to three weeks, I have met two or three new entrants who are experiencing cashflow problems. They are debarred from the MilkFlex loan scheme because of the condition of being in milk production for more than one year. Can this be re-examined? I asked one of the farming organisations why this condition is in place and its view is that people should not get into trouble in the first year of a new venture. We are in uncharted waters with regard to the cost of milk production this year.

Significant investment has been made in dairy expansion. Have the banks revised the cost of production figures they use to calculate the repayment capacity of farmers? We can talk about weather-related issues but it looks as though the costs of fertiliser and concentrate will increase substantially. The cost of labour is also increasing. Has the base used for cost of production and repayment capacity been re-examined?

Low income farmers from all sectors are coming to meet all of us in our clinics because they have been refused access to credit by various financial institutions. Many of them are carrying significant merchant credit at high interest rates with co-operatives or private merchants. We need a scheme whereby farmers can get access to credit. The situation they are in at present cannot be allowed to continue. They are coming under severe financial pressure and there is the mental stress of not being able to pay bills. They have contractors coming in to do work and in some cases their overdrafts have been restricted. They are finding not being able to pay their bills very difficult. I am not stating the banks created this situation. In the vast majority of cases merchant credit has built up over a period of years. We are going to have to look at this. Perhaps it comes under the remit of the Department rather than that of the banks.

Earlier today I mentioned pig farmers. Do the banks have figures on the pressures faced by the various agricultural sectors? The dairy and pig sectors are those coming under the microscope the most. How does our debt level in these sectors, which are under the most financial pressure, compare per cow or per sow with our competitors? We have always been told we are significantly behind our competitors. Is the debt level of those who have invested heavily in either of these sectors in recent years now comparable with our competitors? A significant number of dairy farmers have not invested but what is the debt level per cow of those who have invested compared with farmers in New Zealand, the Netherlands or Denmark? The overall picture of the sector will not give us this information because a significant number of farmers have not invested heavily. Has analysis on this been done?