DEBT ON Irish farms is at an historic high of €5.42 billion and farmers facing cash flow problems were urged yesterday to be honest when seeking help at the Teagasc National Tillage Crops Forum in Newbridge, Co Kildare.
The conference was also told that native harvest production of grain had fallen to an eight year low to 1.68 million tonnes from a high of 2.5 million tonnes last harvest, representing a drop of almost 30 per cent.
Patrick Butterly, an agri adviser with Allied Irish Banks said these debts were manageable for the majority of AIB customers if those in difficulty came forward quickly and were honest about the problems they faced.
“There is no withdrawal by AIB from farming despite the perception that banks are not giving credit to farmers. However, any credit request must be viable and the repayment capacity is the number one consideration,” he said.
He said bankers realised this has been a very tough year for the tillage and dairy sectors but his bank would continue to support farming through what he termed these very challenging times.
John Bergin of RH Hall, the grain merchants, said yields from this year’s harvest would drop to 1.68 from 2.5 million tonnes last year and he pointed out that production had exceeded consumption globally for the past two years.
“Grain price volatility is here to stay but will moderate in the short term,” said Mr Bergin.
He added that supply and demand were the greatest drivers of volatility along with the weather, the price of oil, currency movements and the global economic crisis.
He advised the growers that the risks associated with volatility could be managed to some extent by having a marketing plan.
“Based on each individual’s production costs, a price should be set at which you are willing to sell. I am optimistic prices will lift in the medium term due to concerns over food security as the world population increases and living standards improve,” he said.
Many of the growers said in an open forum at the end of the session that they could no longer afford to produce at €140 per tonne and receive €85 per tonne from his company,
Earlier, Jim O’Mahony, programme manager for tillage, at Teagasc, said the forum was taking place against the background of one of the most difficult grain harvests ever experienced in Ireland.
“The wet weather has impacted on grain quality and made harvesting extremely difficult with most producers still trying to complete the harvest and all this has been compounded by a significant decline in grain prices this year,” he said.
Michael Hennessy, a Teagasc tillage specialist, said that at current and expected grain prices, production of cereals could only be justified where high yields were achievable.
He called for a change in the current practice where cereal farmers pay a lump sum for conacre (rented land) and put forward a proposal that there should be a sharing of profits between land owners and growers.