AIB's slides from the Farmers Journal CAP meetings. With the key decisions on CAP reforms now in place, how the new system will work is becoming clear. In this series of CAP meetings, the Irish Farmers Journal is aiming to provide farmers with information on all aspects of CAP and how it will impact your direct payments for the next six years.

1. Eamonn O’Reilly
Agri Advisor, AIB
Allied Irish Banks p.l.c.
Supporting Irish Farmers

2. Outline
– Importance of Direct Payments
– Effect of Reform on Repayment Capacity
– AIB in Agri Market
– Conclusion
Allied Irish Banks p.l.c. | 2

3. Time of opportunity
Milk Quota Abolition Industry agreed plan – FH2020
CAP REFORM
Allied Irish Banks p.l.c. | 3

4. Agri banking market
• Positive Outlook
• Strong demand for credit expected
– Grant assisted development
– Milk Quota abolition
– Food Harvest 2020
• Incorporate change into plans
Allied Irish Banks p.l.c. | 4

5. Importance of direct payments
0
5000
10000
15000
20000
25000
30000
2006 2007 2008 2009 2010 2011 2012
AverageFarmIncome(€)
0%
20%
40%
60%
80%
100%
120%
140%
160%
DirectPaymentsasa%ofFFI
Family Farm Income Direct Payments as % of FFI
(Source: Teagasc National Farm Survey, various years)
Allied Irish Banks p.l.c. | 5

6. (Source: Teagasc National Farm Survey, 2012)
0
20
40
60
80
100
120
140
All Farms Dairy Cattle Rearing Cattle Other Sheep Tillage
%ofFarmIncome
SFP DAP REPS/AEOS Other
Importance of direct payments
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7. Effect on repayment capacity
• Know there will be winners and losers as part of the reform
• Bank will be stress testing in advance of 2015
– Applying on a tiered basis over term of loan
– May request Direct Payment Statement from customers
Allied Irish Banks p.l.c. | 7

8. Case example – effect on repayment capacity
• Beef Farmer - aged 50, farming 40 acres
(Source: Adapted from Irish Farmers Journal, 2014)
Allied Irish Banks p.l.c. | 8

9. Agri – Key component of AIB’s Strategy
– Maintained strong focus on Agriculture over many decades
– Banking relationship with 2 in 5 Irish farmers
– (Source: Ipsos MRBI, Agri Financial Services Survey, 2012)
– Key sector in which we seek to grow our business
– Dedicated Agri Advisor Team
– Committed to supporting farmers develop their businesses
Allied Irish Banks p.l.c. | 9

10. Conclusion
• CAP is of fundamental importance to Irish farmers
• Will impact repayment capacity for some
• AIB will be applying a stress test on a tiered basis
• AIB is committed to supporting farmers develop their
businesses
• AIB’s strategy is to remain the main farming bank
in Ireland
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11. Important Information
Lending criteria, terms and conditions apply. Credit facilities are subject to repayment capacity and
financial status and are not available to persons under 18 years of age. Security may be required.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.
Allied Irish Banks p.l.c. | 11

12. Thank you
for your
attention