Northern Ireland-Banking concerns for farmers.

NORTHERN IRELAND-Banking issues causing concern

for farmers

The Ulster Farmers’ Union has welcomed the Bank of England’s decision to cut interest rates again to 0.5%, but says farmers won’t benefit unless local commercial banks pass the benefits directly to their customers.

UFU President Graham Furey said: "Farmers owe over £800 million to the commercial banks in Northern Ireland so banking is a big issue for almost every local farm business. We are monitoring very closely what is happening in the banking sector and we are getting plenty of feedback from our members. There are a number of important issues which continue to cause us concern. Firstly the Bank of England has aggressively cut interest rates to help generate economic activity. Farmers will only benefit if these interest rate cuts are passed on in full by their bank and this has not been happening in every case".

Referring to other banking issues which are now causing concern in the farming community, Graham Furey said; "The whole issue of the cost of banking is now being highlighted by farmers. In many instances when farmers have been re-negotiating their overdrafts the cost of borrowing has actually gone up. Our members have complained that arrangement fees for loans and bank charges have also been increasing. These are issues which we don’t find acceptable".

Graham Furey said; "Farmers take a long term view of their businesses and banks also tend to take a long term view of farming, because farm borrowings can be secured against the value of the farm land asset. However many farm businesses are going through a difficult period, particularly in the dairy sector, and commercial banks must be aware of farmers views that they shouldn’t be pushing up the cost of banking at a time when the Bank of England is trying to lower the cost of borrowing to kick start economic activity".