IFA National Chairman Jer Bergin today (Wednesday) said the Glanbia MilkFlex Fund loan initiative, a European pilot scheme, was a welcome innovation marking a new departure in farm finance which would raise the bar for the farm finance offerings which will now be expected from all financial institutions.
“The Glanbia Milk Flex Fund will be available to Glanbia milk suppliers with a Milk Supply Agreement from April/May, and will be watched closely by milk suppliers to other co-ops, and by farmers in other sectors. Our financial institutions must respond with equally well-priced and flexible financial packages for farmers in all sectors, including for short term and seasonal finance,” Mr Bergin said.
IFA National Dairy Committee Chairman Sean O’Leary added: “I believe this well-priced loan package, with its repayment flexibilities linked to specific milk price levels or disease outbreaks, will provide Glanbia suppliers with competitive finance. However, it must spark some serious rethinking by our conventional banks of the pricing and repayment structures of their own offering to all dairy farmers, regardless of which co-op they supply”.
“Also, while this scheme addresses the need for investment financing, it does not deal with the most pressing issue of the moment: the need for well-priced, flexible short-term cash options. This is an area where banks really need to step up to the mark,” he said.
Mr O’Leary said IFA would meet with all the banks on their short and long-term farm finance products in two weeks’ time, and would expect a meaningful competitive response to this latest development, and to the current cash flow crisis on dairy and other farms.