Glanbia Launches Loan Scheme

Glanbia, Ireland’s largest dairy processor, has launched a new fund designed to offer more flexible, competitively priced loans to its milk suppliers in Ireland.  One of the key features is that loan repayments can vary according to movements in milk price.  The ‘Milkflex’ fund will offer loans varying between €25,000 and €300,000 to help producers who are finding it difficult to access credit.  The repayment terms will automatically move in relation to the Glanbia Ingredients Ireland’s (GIIs) manufacturing milk price, the time of year and seasonal milk supply – no repayments will be due during November to February.  Repayments will be reduced when the GII’s base price falls below 28c per litre including VAT for more than three months.  No repayments will be due at all if the GII’s price falls below 26c per litre for three months.  In contrast, if the price exceeds 34c per litre for more than 3 months the repayments will also increase. 

The loan package will be worth €100 million and will be available in three rounds in 2016.  The first, with funds of €50 million, will be available from the beginning of May.  It is an innovative development which the Irish Farmers’ Association amongst others have welcomed.  Agriculture Commissioner, Phil Hogan has described the scheme as ‘ ground -breaking’.  It might be food for thought for the UK dairy sector?