Dr. Anne Finnegan:

I will address Deputy Penrose's questions. At the end of 2014 we conducted a study that was as comprehensive as we could at the time, of the outlook for the dairy sector for the year ahead. We engaged with representatives from the Irish Dairy Board, individual processors, farming organisations to get their views of the dairy commodity markets in the year ahead. At that point we took the view that milk price would fall - and this is widely accepted - on average by 26 cent to 28 cent a litre. There has been some firming in the markets in recent weeks. We keep that under constant review but we are aware of issues that may materialise on farms. We stress-test farm cashflow in order to support farmer at those levels. I respect the comment that not all farms will be impacted equally and everybody's circumstance will be different. Certainly our own experience from last year would be that on some farms there has been considerable investment from farm cashflow last year. Some farmers forward purchased inputs at the back end of the year. Some people will have a significant tax bill and superlevy bill, as was pointed out. We will consider all the factors when we are working with people on an individual basis, looking at the factors of their individual circumstances and the right support for their situation. For some, it may be something in the short term to get them through a six month period where cashflow is tight, for others it may mean something more long term, such as refinancing some of the capital investment they did from their cashflow in the previous year. There is a range of options we can work on.

We have to watch how this year pans out, but not everybody will be impacted to the same degree. There are dairy farmers who have plans to invest and will continue to invest as the year goes on. We will be supporting them. We take a very long-term view of short-term problems. Farming by its nature is a cyclical business but the volatility we are seeing means that we will be lending to those farmers who have capital investment plans. We will be taking a long-term view and a long-term average budget price of what we think milk will cost in the next ten to 15 years. We will support them on that basis. While they may need some short-term support from us we do not see that as an inhibitor to supporting the investment in the sector in the year ahead or in the years after that.