THE MAIN farm organisations attacked the failure of banks to extend credit to farmers when they met Minister for Finance Brian Lenihan for pre-budget meetings.
Irish Creamery Milk Suppliers Association president Jackie Cahill told Mr Lenihan it was foolhardy to rely on the banks making credit available at a competitive interest rate to the productive sector of the economy.
He said the kind of commitments the State had received from the banks to renew the flow of credit to the wider economy had all the “force of a boy scout’s pledge and about as much credibility”.
The farm leader said that the full force of regulation and compulsion was now the only option left to the Government as the banks had shown “nothing but contempt and arrogance to the State and taxpayers that had repeatedly rescued them”.
Mr Cahill said banks had undoubtedly restricted credit to viable business and they had begun – and would continue – to rebuild unjustifiable profits by excessive charging both in terms of credit and associated bank charges.
He said the equivalent of 23 per cent of farm income was consumed in bank interest and charges and there was a growing debt crisis in farming arising from the huge investment and the collapse of farm income.
Irish Farmers’ Association (IFA) president Pádraig Walshe also emphasised the serious income situation facing farmers and complained of the lack of credit being extended to them by banks.
He stressed that farmers cannot afford a carbon tax which would take another 1 per cent off an already disastrous farm income situation. The income levy discrimination against farmers as sole traders must be addressed in this budget, he added.
Mr Walshe said details of farm income for 2009 to be released next week were likely to show a reduction of at least 20 per cent. And Government cuts already imposed are contributing significantly to this difficult situation on many farms, he said.
He said investment in the productive sector of the economy made excellent sense as the money remains within the country and generates added value, export-led growth and badly needed economic activity in rural Ireland.
“This year’s farm income drop comes on top of a 13 per cent decrease in 2008. Government cuts in Reps , disadvantaged areas, forestry premium, suckler cow welfare and the fallen animal schemes amount to €130 million,” he said.
This was Mr Walshe’s final pre-budget meeting with a minister for finance. The campaign to elect his successor comes to a close next week and voting will get under way on December 1st in the 947 IFA branches.
The three candidates in the running to succeed Mr Walshe are John Bryan, chairman of Kilkenny IFA; Derek Deane, deputy president; and Richard Kennedy, chairman of the National Dairy Committee.