Repayments will take milk prices into account...
From May, Irish dairy farmers will have a new, flexible option when they’re in need of a loan.
Glanbia has launched a “first of its kind” finance scheme worth a total of €100 million which aims to shield dairy farmers from price fluctuations and provide them with finance when they need it most.
Individual loans worth between €25,000 and €300,000 will be made available and repayments will crucially be index-linked to milk prices.
The Glanbia MilkFlex Fund will employ “flex triggers” to help adjust repayments in line with Glanbia Ingredients Ireland’s manufacturing milk price.
There will also be no repayments required from November to February to account for the extremely low milk production during that time of year.
A variable rate of 3.75% above the monthly Euribor cost of funds has been set.
Loans will have a standard term of eight years, but may be extended by up to two years when volatility triggers are enacted.
Repayments will be automatically deducted from the supplier’s milk receipts by GII.
Finance Ireland, the Ireland Strategic Investment Fund and Rabobank intend to invent in the fund, with Finance Ireland overseeing the loans.
Minister for Agriculture Simon Coveney said: "While any decision to invest must be based on sound financial planning, it is important for farmers to be able to access affordable financing in a timely manner."