COVID-19 EDITION Farmer Friendly Finance

Cultivate Review COVID-19 EDITION Farmer Friendly Finance

Highlights

Average loan amount of €24,120 over a 5.6-year period Cultivate farm loans remain broadly stable during Covid-19 Stocking and working capital continue to be the most popular loan purpose 69% of loans to beef farmers with 18% to dairy farmers The overall story With the disruption and uncertainty of Covid-19, farmers have continued to turn to Cultivate Credit Unions for loans. The average Cultivate loan application in 2020* was for €24,120 for a term of 5.6 years to a farmer who owned a farm of circa 33 hectares and had €108,117 debt on their farm. The most popular loans were for stocking and working capital, followed by farm buildings. The Cultivate loan continues to be part of the consideration set for farmers who wish to: ✓ Buy stock in the Spring or Autumn ✓ Build extra bays onto their existing cattle accommodation ✓ Develop pasture infrastructure from reseeding to roadways and water systems ✓ Build a calving house ✓ Invest in new milking parlour equipment e.g. bulk tank ✓ Build a machinery shed ✓ Invest in an upgrade of their tractor or machinery ✓ Access working capital for periods when cashflow is under pressure

Overall Top 7 reasons Who accessed picture for a loan Cultivate loans?

Average loan Stocking and Sector: €24,120 working capital Beef Median loan 23% 69% €20,000 Farm buildings Dairy Average loan length 20% 18% 66 months Tractor Sheep Median loan length 19% 10% 83 months Equipment Other Average HA owned 14% (pigs, tillage) 33 Land 3% Median HA owned improvements 26 10% Average debt Farm land €108,117 5% Median debt Jeep €60,000 5% Off-farm income 86%

* 1/3/20- 30/9/20 How does this year compare to last year**? Farm Sector 2019 2020 The customer profile for Cultivate loans % Beef 67% 69% stayed broadly the same year-on-year with a marginal increase in the number % Dairy 22% 18% of beef farmers looking for loans. Beef farmers accounted for 69% of Cultivate % Sheep 6% 10% loan applications, a 2% increase, while dairy farmers applied for 18% of the % Other 5% 3% loans, down 4% year-on-year.

There has been a noticeable increase Type in the median loan term for farm loan 2019 2020 applications - up by 38% year-on- Stocking & Working 25% 23% year. This jump reflects the changed Capital environment with farmers looking to Farm Buildings 21% 20% spread repayments over a longer period. Tractor 13% 19% The most popular loans in 2020 were for Equipment 10% 14% stocking and working capital, followed by farm buildings which is consistent Land Improvements 12% 10% with the key drivers of loans in 2019.

Farm Land 8% 5% **Comparison dates: 1/3/19 – 30/9/19 versus 1/3/20- 30/9/20 Jeep 5% 5%

How do the dairy and Dairy Beef beef sectors compare? The average loan to a dairy farmer was Average loan €30,242 €23,092 €30,242 in comparison to €23,092 for Median loan €30,000 €20,000 a beef farmer. Dairy farmers were also bigger landowners than beef farmers Average loan length (months) 71 65 with average owned holdings of 39 HA Median loan length (months) 84 83 in comparison to 31 HA for beef farmers. Average HA owned Dairy farmers continue to carry more 39 31 debt, with the average debt on a dairy Median HA owned 40 24 farm being 83% higher than a beef Average debt farmer, at €167,225 versus €91,556. €167,225 €91,556 There is a high prevalence of off-farm Median debt €123,000 €50,000 income, with over 9 in 10 beef farmers Dairy cows (average) 87 N/A highlighting that they had off-farm income. Suckler cows (average) N/A 18 Off-farm income (yes) 59% 92%

Cultivate Review Covid-19 Edition About Cultivate Normal life may be on hold, but farming life continues. Like farmers, Credit Unions are here for the long haul. Cultivate is an initiative of a group of 26 Credit Unions that provides short to medium term loans built specifically for the growing needs of our farming members.

What our farmer members say?

“We wanted to “I decided to put put in a new bulk an extension on to tank and extend my existing shed the cubicle shed. for calving. In no I found working time at all, I was with Cultivate very approved. Life is easy. They suited much easier on the the way I wanted farm now since I to repay the loan got my Cultivate over the summer loan.” months.” Paul Crowe John Finucane Beef Farmer Dairy Farmer

Participating Cultivate Credit Unions County Clare: Derg Credit Union (Scariff, Killaloe) | Ennistymon & District Credit Union (Ennistymon, Miltown Malbay, Lisdoonvarna) | Kilrush Credit Union (Kilrush, Quilty) | St Francis Credit Union (Ennis, Clarecastle, Kildysart, Kilmihil, Lissycasey, Newmarket on Fergus, Sixmilebridge, Tulla) County Cork: Ballincollig Credit Union | Bantry Credit Union (Bantry, Castletownbere) | Kanturk Credit Union | Mallow Credit Union (Mallow, Ballydaheen, Buttevant, Charleville, Doneraile, Millstreet) | Mitchelstown Credit Union | Synergy Credit Union (Fermoy, St Patrick’s (Lower Glanmire Road, Cork), Watergrasshill) | Youghal Credit Union (Youghal, Killeagh) County Galway: Ballinasloe Credit Union | Gort Credit Union | Naomh Breandan Credit Union (Loughrea, Woodford) | St Jarlath’s Credit Union (Tuam, Abbeyknockmoy, Corrandula, Dunmore, Headford, Mountbellew, Moylough, Turloughmore) County Kerry: Cara Credit Union (Tralee, Castleisland, Killorglin) | Listowel Credit Union (Listowel, Ballybunion) | Killarney Credit Union (Killarney, Cahersiveen, Kenmare) | Cois Sionna Credit Union (Tarbert) County Kilkenny: Thurles Credit Union (Urlingford) County Limerick: Cois Sionna Credit Union (Askeaton, Glin, Foynes, Kildimo, Pallaskenry, Shanagolden) | Mallow Credit Union (Broadford and Dromcollogher) | Mitchelstown Credit Union (Ballylanders, Knocklong) County Offaly: Birr Credit Union | Tullamore Credit Union County Tipperary: Borrisokane Credit Union (Borrisokane, Cloughjordan) | Nenagh Credit Union | Templemore Credit Union | Thurles Credit Union (Thurles, Killenaule) County Waterford: Youghal Credit Union (Ardmore) County Westmeath: Mullingar Credit Union (Mullingar, Castlepollard, Kinnegad, Rochfortbridge)