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Minister Smith meets banks to discuss difficulties in Farming Sector

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD, met the major banks and the Irish Banking Federation to discuss ongoing credit difficulties being experienced in the farming sector.

Minister Smith described the meeting, as "very useful and constructive" and he expressed "optimism that ongoing efforts will impress upon and facilitate banks in providing more assistance to their farmer clients at this very difficult time, particularly having regard to low product prices this year." The Minister relayed his intention to continue ongoing discussions with the IBF and the banks with regard to agri-sector issues including credit to farmers. This will represent a significant component of the ongoing Government objective to free up lending on a commercial basis into the economy as a whole.

It will also compliment the work of the Credit Supply Clearing Group, set up by the Tánaiste, to identify credit bottlenecks to viable businesses and to seek to identify credit supply solutions. This group includes representatives from the main banks, business interests, including the farming sector, and state agencies.

The Minister said that the meeting had provided him with the opportunity to "impress upon the banks the short-term liquidity difficulties being experienced by the farming sector and, in particular, the need to extend normal working capital facilities to farmers."

In outlining the income base that Exchequer and EU payments provided for farmers, Minister Smith reiterated the Government's commitment to pay the second 40 per cent of the farm waste management grants, in January 2010, which will help to relieve financial pressures. Further payments in the pipeline include the 70 per cent advance payment on the Single Farm Payment, which will issue in mid-October, as well as REPS payments.

The Minister emphasised the difficulties associated with poor weather conditions as well as low prices, particularly in the dairy sector, and said that "farmers require access to higher levels of short/medium term credit facilities to assist in weathering the current storm."

Minister Smith welcomed the response of the banks in which they recognised the current short-term difficulties faced by farmers and made it clear that they were open for business. They encouraged farmers to initiate contact at an early juncture in instances where difficulties with regards to short term financing and sourcing working capital were envisaged.

The Minister said that he would continue to monitor the situation, as it affects farmers, in the coming months and said that he looked forward to continuing a useful and constructive dialogue with the banks and the Irish Bankers' Federation.

Date Released: 11 October 2009