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Smith Meets Banks to Stress the Need for the Availability of Credit to Farmers and the Food Industry - Particular Difficulties in the Pig Sector

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD, today met the Irish Banking Federation as part of a series of meetings at which he has stressed the continuing need for banks to provide an adequate flow of normal credit to farmers and the food industry.

Minister Smith restated the Government's commitment to creating a fit for purpose banking system and said that the Government was continuing to take appropriate actions to sustain the banking system and facilitate the flow of credit to the wider economy.  The Minister said that "adequately resourced and financially sound banks are needed to support the financial needs of agribusinesses and farm households".

While the Minister acknowledged that there appear to be fewer problems with access to credit than there were a year ago, he said that "there appears to be a particular problem in the pig sector, where feed prices have increased rapidly in the past six months without a corresponding response in prices.  This is causing particular pressure for many pig farmers who are experiencing difficulties in terms of paying for feed, extend their merchant credit or in securing further funding from their banks".

Mr Smith noted that the price of pig feed to producers has increased significantly in the last year and is forecast to increase further in the near future, at a time when there is less credit available than during previous feed cost crises, and said that "the effect of this coincidence of events is that some producers are now unable to pay their feed bill at a time when millers cannot extend credit to producers".

The Minister said that this regular series of meetings with the Irish Banking Federation have "proven to be particularly useful and have provided a very useful opportunity for me to impress upon the banks the need to ensure adequate access to funding for the Irish agriculture and the agri-food sector.  The sector has proven itself to have been robust and resilient throughout the current economic difficulties and the short-term and long-term prospects for the sector are encouraging.  It is vital that the potential growth prospects for the sector are not compromised by a lack of access to adequate funding".

Date Released: 14 January 2011