Cultivate Review 2020 Farmer Friendly Finance

Highlights

Average loan amount of €24,799 over a 5.75-year period May was the busiest month for loan applications Stocking and working capital continue to be the most popular loan purpose 66% of loans to beef farmers compared to 22% to dairy farmers The overall story 2020 was a year like no other but farmers throughout the country showed an incredible ability to deal with the disruption and uncertainty of Covid-19. This resilience was reflected in the performance of Cultivate loan applications. In comparison to 2019, there was a 1% increase in the total value of loan applications. The average Cultivate loan application in 2020 was for €24,799 given to a farmer over 5.75 years who owned a farm of circa 35 hectares and had €109,112 debt on their farm. The most popular loans were for stocking and working capital (25%), farm buildings (20%) and tractor purchase (16%). The Cultivate loan is ideal 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: €24,799 working capital Beef Median loan 25% 66% €22,000 Farm buildings Dairy Average loan length 20% 22% 69 months Tractor Sheep Median loan length 16% 10% 84 months Equipment Other Average HA owned 15% (pigs, tillage) 35 Land 2% Median HA owned improvements 28 9% Average debt Jeep €109,112 6% Median debt Farm land €62,918 5% Off-farm income 85% Busiest Month (# of applications) May Quietest Month (# of applications) October Busiest period for loan applications In 2020, May was the busiest month for loan applications, accounting for 13% of total applications, while October was the quietest month overall. In 2019, April was the busiest month while December was the quietest for loan applications. In 2020, January was the busiest month for applications from dairy farmers accounting for 18% Loan Applications 2019 2020 of total dairy applications. March 2020 showed a significant drop in applications as the country reacted to the arrival of Covid-19. April and May saw a strong rebound as farming life continued.

Farm Sector 2019 2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Beef 64% 66% % Diary 26% 22% % Sheep 6% 10% Type 2019 2020 % Other 4% 2% Stocking and working capital 26% 25% How does 2020 Farm buildings 19% 20% compare to 2019? Tractor 14% 16% The customer profile for Cultivate loans Equipment 11% 15% stayed broadly the same year-on-year Land improvements 13% 9% with a marginal increase in the number of beef farmers looking for loans. Beef Jeep 5% 6% farmers accounted for 66% of Cultivate Farm Land 6% 5% loan applications, a 2% increase, while dairy farmers applied for 22% of the loans, down 4% year-on-year. The most popular loans in 2020 were for stocking and working capital, followed by farm buildings which is consistent with the key drivers of loans in 2019. How did the beef and dairy sectors compare in 2020? Dairy farmers continue to have larger 2020 only Beef Dairy on-farm debt, apply for larger Cultivate loans and have less need for off-farm Average loan €23,781 €30,116 income when compared with their beef farmer counterparts. In 2020, the Median loan €20,000 €30,000 average loan to a dairy farmer was just Average loan length (months) 69 72 over €30,000 in comparison to €23,781 for a beef farmer. Dairy farmers were Median loan length (months) 84 84 also bigger landowners, owning on Average HA owned 32 40 average 40 HA of land in comparison to the 32 HA owned on average by beef Median HA owned 24 40 farmers. Off-farm income reflects a Average debt €93,948 €157,073 significant divide as over 90% of beef farmers have an off-farm income while Median debt €52,057 €118,338 two-thirds of dairy farmers were in the Dairy cows (average) N/A 81 same position in 2020. Suckler cows (average) 18 N/A Off farm income (yes) 93% 65% Cultivate Review of 2020 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 wouldn’t “The credit union be where we are understood our today without business and our the help of the needs.” Cultivate loan.” Robert Cogan Maurice Cogan Dairy 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 Desmond Credit Union (Tarbert) County Kilkenny: Thurles Credit Union (Urlingford) County Limerick: Cois Sionna Desmond Credit Union (Askeaton, Glin, Foynes, Kildimo, Pallaskenry, Shanagolden) | Mallow Credit Union (Broadford and Dromcollogher) | Mitchelstown Credit Union (Ballylanders, Knocklong) County Longford: Mullingar Credit Union (Longford Office) 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)