A leading agri-food analyst in Ireland encouraged the country's food processors and dairy co-ops to look for funding from private venture sources to lessen their dependence on banks, the Irish Examiner reported.

AgriFood Business Partners Finance Director Cathal Fitzgerald told 400 participants in the AgriFood Business Partners Conference held in Dublin yesterday that agri-food firms in the US rely on private venture capital to provide 80% of their funds while the agri-food sector in the EU only gets 20% of their funding from venture capital sources, the report said.

Fitzgerald also predicts that a change in focus will occur in terms of venture capitalists getting a return on their investment. He said that the investors will set their eyes not on capital assets like land values but towards cash flow.

Fitzgerald told the agri-food leaders in the conference, "The existing banks will certainly have a role to play in expansion, but there are other sources. There is strong interest being shown from other funds, and that is very important. If we are going to have a sustainable growth strategy, bringing more capital into play will be the key."  

A capital investment of more than €2.5 billion is needed by dairy farming segment in order to bring to fruition its output growth goal of 50%. This forms part of the €12 billion stated growth target of Ireland in yearly food and drink exports by 2020, representing an increase of the current figure of about €10 billion, the report said.

Fitzgerald added that debts amounting to €4 billion are being shouldered by family farms while those debts concerning farming activities are pegged at €1.9 billion.He said, "There is a necessity to ensure that the mistakes made in the pre-crash Celtic Tiger boom are not repeated in the agri-food sector as expansion gathers pace. Ireland must increasingly compete in the global marketplace, where every facet of competitiveness is critical to sustainable investment and development."