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HomeFarming News‘Farmers tell me they are being refused finance’
Catherina Cunnane
Catherina Cunnanehttps://www.thatsfarming.com/
Catherina Cunnane hails from a fifth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the company in 2015.
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‘Farmers tell me they are being refused finance’

According to Cavan-Monaghan Sinn Féin TD, Matt Carthy, “a perfect storm of crises” has hit the pig sector.

He believes that any of those crises would have been a “calamity”, but together, they represent an “existential threat, unless real action is forthcoming”.

That is what he told Minister for Agriculture, Food and the Marine, Charlie McConalogue, during a topical issue debate in the Dáil on Tuesday, February 1st, 2022, which focused on the pigmeat sector.

Carthy stressed that the pig sector in Ireland is a vital, often under-recognised “component” of Ireland’s rural economy.

The deputy pointed out that the sector supports almost 10,000 jobs directly and indirectly.

According to the deputy, there are 1,675 pig farms across the state, 1,108 of which have five pigs or fewer.

The pig sector is the third-largest agri-food sector in the country. Exports of pigmeat alone were worth over €893 million in 2020.

The industry is concentrated in particular parts of the country and his constituency of Cavan-Monaghan is a “prime” example. He added that pig farming is an “integral” part of the local economy in those regions.

“Put simply, if the pig sector is in trouble, so too are those rural economies. The sector is in big trouble.”

Brexit and rising input costs

In the first instance, he explained that Brexit has had a “devastating” impact. Britain is the industry’s most important export market, and exports there are down 14% since Brexit.

“Considering the impact of Brexit, will the government deliver direct supports via the Brexit adjustment reserve?” he asked the deputy.

“If the reserve cannot be used for this sector at this time, it is difficult to see how any farmer will ever be able to secure funding from it.”

Furthermore, he explained that transport costs have “militated” against any real prospect of sourcing alternative markets.

Continuing, he said: “Input costs have also gone through the roof. The cost of feeds such as barley and wheat has increased by 50%, and increases in energy costs have hit hard.”

“I spoke to one pig farmer today whose gas bill has increased from €10,000/month to €40,000/month. Electricity price hikes also have a severe impact. Input costs are going up, and factory prices are falling.”

Insuficcient processing capacity

Carthy said that to compound the situation, the capacity of processing plants is at a “crisis point” due to staff shortages.

This results in delays in getting pigs to factories, and every day delayed means further increased costs.

“If those delays result in pigs becoming out of specification, there is a further cost of up to €50 per animal,” he explained.

In essence, he said that Ireland has insufficient slaughter capacity. He explained that this means “farmers are paying more to feed pigs for which they receive less”.

“We need action in the first instance on the staffing crisis in the processing plants.”

“There is an immediate cash flow crisis, but it did not happen overnight.”

Funding

The deputy acknowledged Minister McConalogue’s recent engagement with banks and the Strategic Banking Corporation of Ireland, SBCI.

Previously, the minister issued a statement confirming that the Brexit Impact Loan Scheme and the Covid-19 Credit Guarantee Scheme – can be used for working capital finance and include features that address the “current financial needs of pig farmers”.

The deputy asked if there would be increased funding to the SBCI ring-fenced for the pig sector?

Carthy then asked will there be relaxed conditions in order that farmers who have already been denied finance by their banks will be supported.

“Farmers tell me they are being refused finance, especially due to the volatility, for the alleviation of which we are encouraging them to take the loans in the first place.”

“Will the Department ensure all levies being imposed on these farmers are suspended for the duration of this crisis?”

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