Farmers increase borrowings by 11%
IRELAND - Irish farmers pushed their borrowings up 11% to €3.8 billion in 2006, as farmers mortgaged their farms to buy foreign properties.
4 January 2007
1 minute read
A Teagasc analysis that borrowings in 2006 increased comes against a background of higher deposits, higher land values (equity) on one side and increased interest rates on the other.
“An increasing proportion of farmers are looking to sweat the assets they hold in farming (land/quota) and outside of farming in Ireland to raise capital for overseas investment or for new business ventures.
“This is responsible for some of the increases. In addition, farmers are investing with more confidence in farm assets, machinery and buildings. “Higher income from off-farm employment is also increasing the borrowing capacity,” the Teagasc report states.
Teagasc noted that interest rates have been raised by the European Central Bank (ECB) six times in the last 12 months.
“Each 1% rise in interest rates will take €40 million out of Irish agriculture in 2007,” it said. Teagasc also noted that a demand pull on available labour resources as a result of the booming economy is having a double impact on farming.
Source: Irish Examiner
