'If money could talk, all mine would say is goodbye': Limerick farmers facing cashflow difficulties - Ireland News Beep

CHAIR of ICMSA’s Farm Business Committee, Pat O’Brien, has advised farmers to “honestly assess” their current financial position and to have a contingency plan in place in case of cashflow difficulties.

His comments follow a meeting with all the pillar banks at which he outlined the financial concerns currently facing farmers.

“I’m a typical and lifelong farmer and if money could talk, all mine would say is ‘goodbye’, farmers must plan and work to that plan if we are to ensure cashflow,” said Mr O’Brien.

Noting that the two traditional ways that farmers could get through a cashflow deficit were reducing expenditure or selling surplus stock, Mr O’Brien said that the banks were eager to stress that they have available options designed to ease short-term cashflow difficulties for farmers.

One such option is refinancing capital investments already made over the last three years, and which had been originally funded by the farmers themselves.

“For example, a farmer who built a shed two years ago using their own money may now be able to draw down finance against that investment. Measures like that can provide badly needed ‘breathing space’ for farmers who are genuinely caught for cash at the present,” he said.

The key point here, stressed Mr O’Brien, is the need for farmers to raise this option with their banks before the option might be required.

“Have the discussion even if you don’t think you’ll need it. There’s no harm in having that safety net ‘ready to go’ if needs be. One of the biggest issues for farmers is protecting their credit rating and the banks themselves acknowledge that farmers will go to extraordinary lengths to meet repayments, often putting themselves under severe financial pressure.

“A simple conversation with the bank may reduce this pressure. And even if they went to ‘Interest only’ repayment options, that might affect a farmer’s credit rating and obviously should be avoided if possible – but it’s not the end of the financial world either,” he said.

Mr O’Brien said they are seeing a cashflow deficit coming our way this year due to reduced output prices, increased input costs and a very long winter.

“The positives of last year are being ‘eaten up’ and farmers are worried that they will find themselves stretched for cash. So ICMSA is advising our members to talk to their banks about their cashflow requirements and make sure they have some contingency in place, in the event of cash becoming tight.

“There’s also the reality that many farmers will face significant tax bills in the months ahead, while also trying to cope with high input costs and low milk prices. That’s going to be a challenge, but it can be navigated where the banks are approached, options examined and plans put in place,” said Mr O’Brien.

The ‘bottom line’ is that repayments have to be manageable, he said.

“There’s no point in continuing crushing repayments in a time of low prices and high costs if there are other options available. The banks have told us that they are available and that if farmers ‘reach out’ that they’re happy to work through those options with them.

“If farmers need room, time and options during a very challenging period – such as we are going through now – then the banks will give them that. We urge farmers to think about it hard and reach out to see what their options are if they see insurmountable cashflow problems coming,” concluded Mr O’Brien.

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‘If money could talk, all mine would say is goodbye’: Limerick farmers facing cashflow difficulties

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