Shropshire and Mid Wales farmers warned against taking pay day loans
Dairy farmers in Shropshire and Mid Wales have been warned not to be tempted by pay day loan companies cashing in on their cash flow worries.
NFU Cymru leader Stephen James, a milk producer himself, said he knew of farmers who had been approached by loan companies since news of First Milk postponing milk cheques for a fortnight had been revealed.
The company had to suspend its payments for milk to its farmers last month after it lost a contract with Muller and faced a drop in the price for its milk.
Mr James, the president of NFU Cymru, said: "Pay Day loan companies have been offering to agree terms with farmers. It seems very tempting but the problems arise when those farmers can not keep up the payments and the interest means the debts then escalate."
He was in the region to speak to farmers about the crisis of milk prices currently hitting the industry.
The meeting, at the Meifod farm of Montgomery branch chairman, Jonathan Wilkinson, attracted both dairy and livestock farmers keen to here from Mr James about the current problems facing the industry.
The NFU president urged farmers who had financial worries to talk to their banks.
"We as farmers depend on our milk cheque. This is a high costs industry and if we have bills to pay and our income has been suspended for a week then it is easy to find ourselves in a pickle.
"I have a contract with First Milk and I must admit, with all my direct debits going out in the days after the milk cheque comes in, it has not been easy.
"The banks have always been and still are the safest place to go for help and advice," he said.
"Don't be tempted by these pay day loan companies. I know of one farmer from Meirionnydd who lost his farm because he took our a loan.
"His debt of £650,000 grew to £1.5 million and he had to sell his farm."
