Mr. Sean Farrell:

I will start with issues raised by Deputy Willie Penrose. Each loan is individual to each farmer, no two cases are the same. Changes to commodity prices; dairy, grain or beef income, is one part of an overall cashflow cycle for farms. Bank of Ireland takes all income and expenditure into consideration. Most farms have some source of off-farm income - the single farm payment was mentioned earlier - and all factors are considered when applying a loan solution. The Deputy asked about estimates for investment requirements. We partnered with Teagasc on its investment needs report. It highlights that €1.5 billion will be needed by the dairy sector to achieve Food Harvest 2020 targets. Bank of Ireland has a €1 billion investment fund specifically to meet this need.

On merchant credit, if farmers do not wish to avail of this credit and essentially become cash purchases, there are seasonal and stocking loans available as part of our overall suite of products for cash purchases or working capital. Where farmers wish to invest in their farms and are availing of grant aid, we can provide bridging loan solutions in conjunction with approved departmental schemes such as the TAM, targeted agricultural modernisation scheme. This allows work to progress.

Having spent time in New Zealand reviewing its farming and banking practices, there is a lot to learn from it but it is not a panacea for us. Development has occurred there at an aggressive pace but it has its own financial challenges and while lessons can be learned from international example, Bank of Ireland wants to put sustainable, prudent solutions in place.

On assessment criteria, we seek the information we do in order to make the right decisions for the bank and the customer to ensure we are lending sustainably.