“There is a major opportunity for the Irish food and drink sector because of changing diets worldwide involving a shift towards more dairy and protein products,” he says.
“Under the Government’s Food Harvest 2020 programme, there will be a significant increase in output from Irish farms, making agri-business a key sector for both the bank and the wider economy.”
With this in mind, Bank of Ireland introduced a €200m Agri Farm Investment fund in July 2011, dedicated to supporting the financial needs of the agricultural sector.
“The fund is almost fully committed, and is currently going through the draw down stage for various projects. We expect to increase this fund shortly. We have had a lot of requests for upgrading of milking parlours and there have been quite a few land deals covered under the fund – we have provided funding for 12,000 acres in 2011,” says Lauhoff.
“Agri-business has always been a crucially important sector for the bank and the wider economy and with the growth in output projected for the sector Bank of Ireland is continuously building up its own expertise in this area.
“Bank of Ireland has 50,000 agri customers and is committed to providing them with the support they need to grow their farms.”
The agri-business fund is open to new and existing customers and is available to those who are involved in agri-related SME businesses, ranging from farmers to food-related businesses.
The fund is available for investment in a wide variety of purposes including the purchase of machinery and land, upgrading housing and other facilities, the construction of farming buildings and for purchasing stock.
Focusing on credit, Lauhoff says Bank of Ireland has recorded an increase in demand from the agri-business sector, in contrast to the overall demand for credit among businesses, which has been quite muted.
“This is because the sector is performing well and in the majority of cases credit applications are getting through. Efficiency of production is going to be more important going forward, and farmers are taking the opportunity now to invest in their farms to increase output and efficiency so that they will be well prepared to deal with future price volatility.
“Bank of Ireland has no restraints in lending into the agri sector. We are committed to ensuring that the appropriate funding is in place to support all viable farming enterprises so they can participate and avail of growth opportunities.”
An example of this is Bank of Ireland’s co-operation agreement with farm equipment supplier John Deere, which it entered into last August.
Administered by Bank of Ireland Finance, the agreement enables John Deere dealers to offer customers a full range of flexible machinery financing options.
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