Arion Bank denies delaying farm loans over EU vote

Arion Bank has rejected claims that it is postponing lending decisions for cattle farmers until after a referendum on opening membership talks with the European Union, mbl.is reports. The bank says it is facing strong competition in agricultural lending from other banks and Byggðastofnun.

“It is not true that the bank has sent the message that decisions on loans to cattle farmers are being delayed until after the referendum,” said Sigurgeir Sindri Sigurgeirsson, Arion Bank’s regional manager. “On the contrary, we are experiencing competition in matters related to agriculture.”

His comments followed remarks by Trausti Hjálmarsson, chairman of the Farmers’ Association, who said there were rumours that banks were holding back until after the vote.

“I cannot confirm something that takes place between people, but I want to use this opportunity to clarify that this is not the case,” Sigurgeirsson said. “We work extensively with farmers, and I want to stress that this is not causing disruption.”

He said there was a need for investment in the sector, particularly in dairy farming. Several sheep sheds were also being built around the country, he said.

Sigurgeirsson confirmed that older cowsheds with milking parlours and pipeline milking systems were operating under exemptions, and that regulations on animal welfare included deadlines relating to the issue.

Asked about his position on the referendum, Sigurgeirsson said he did not mix politics with his role as a bank executive. His view of the European Union, he added, had not changed since he worked for farmers.

Farmer Hólmsteinn Orri Þorleifsson raised the issue at a meeting in Sauðárkrókur the previous week. He said his family needed to invest more in their farm, but claimed that “everything is locked” while membership talks continued.

According to Þorleifsson, banks would not finance agricultural development while there was no predictability. He said this would lead to stagnation, discouraging young people from buying farms, building farm facilities or carrying out maintenance.