I, along with my officials, am in regular contact with farm bodies, various national banks and the Banking Federation concerning credit and indebtedness matter relating to farmers. I am acutely aware due to recent weather events that some farmers may be having short-term difficulties in managing their borrowings and in my recent engagements with the banks I requested that they take a flexible approach towards extending credit to their farmer customers arising from the weather related difficulties. The banks have responded to my call for understanding and flexibility and indeed have issued advertisements in national media telling farmers that they are willing to provide short-term facilities to deal with the feed issues.
In terms of the medium term trends of indebtedness in agriculture, Central Bank data indicates that the total stock of farm borrowing has been largely stable since the end of 2011, having fallen by €1 billion from its peak of €5.2 billion in early 2009 to its current level of approximately €4.2 billion. While this recent reduction and subsequent stabilisation of indebtedness is positive, I feel it is also important to highlight that financial indebtedness can also be alleviated by improved productivity, enhanced skills and higher prices. In that context, the implementation of Food Harvest 2020 has a major role to play in improving overall competitiveness at farm and industry level as well in maximising the potential contribution of this indigenous sector to economic recovery.
I will continue to meet with relevant parties, including the Irish Banking Federation, on a regular basis to impress upon the lenders the importance of being proactive and flexible with the farming sector in addressing credit-related matters, including levels of indebtedness.