ICSA rural development chairman Seamus Sherlock has slammed Ulster Bank for profiteering on the agricultural cash flow support loan scheme.
Mr Sherlock said that he was shocked to learn that Ulster Bank was charging a 1% set up fee for farmers availing of the special 2.95% interest rate.
“This scheme is providing €150m in low interest loans to farmers sourced from the Strategic Banking Corporation of Ireland,” he fumed.
“Critically, the Government has leveraged some €11m of EU exceptional adjustment aid with exchequer funds of €14m, which provides an interest subsidy of €25m.
“The EU funds were specifically allocated to benefit farmers in the light of the commodity price crash in 2016 and the exchequer top-up was meant to amplify this support.”
Mr Sherlock went on to say that the strategic decision taken by Minister Creed to put this money in as a subsidy for low interest loans was a very deliberate effort to get the maximum benefit to farmers who are struggling with cash flow and merchant credit issues.
“The spirit of this was that the 2.95% interest rate coupled with the interest subsidy means that banks should have adequate margin without resorting to additional creaming off of money from farmers,” the rural development chairman continued.
“ICSA welcomes the fact that Bank of Ireland and AIB are happy to operate the scheme without recourse to additional charges but we are very disappointed with Ulster Bank on this.
“If all banks had taken this approach, it would have amounted to some €1.5m taken as extra profit out of farmers’ pockets when the total actual support is €25m.
“As it stands, this will cost Ulster Bank customers some €300,000 extra which is coming from farmers who by definition are under pressure on the cash flow front.
“It is important to note that the huge demand and very tight timeframe for this scheme meant that, realistically, farmers had no potential to shop around and therefore were a sitting duck for this egregious charge.”