IRISH beef farmers will have to run more efficient operations with tighter margins and lower prices if they are to ride out the BSE crisis, according to bankers.

They say the full impact of the crisis on farmers livelihoods will become more apparent over the coming weeks and the severity of it also depends on how much money Agriculture Minister, Ivan Yates manages to wrest from the EU to help the industry.

In addition, bankers say land prices have now peaked because of the scare and may begin to fall again. Cattle prices have fallen by around £150 on an animal previously valued at £1,000 (approximately 15 per cent) since the British BSE crisis commenced. But agricultural lenders point out that beef prices had already been weakening.

Many farmers are now due to repay "stocking loans" but several banks said this week that they were extending the repayment deadline by at least a month.

Bankers say there is no real sense of panic among beef farmers so far, but many are "up to their tonsils" in overdraft facilities.

"The view among lending institutions is that if you demand that farmers clear loans you will just make a bad situation worse," said one banker.

Those most affected by the crisis are beef farmers who took out stocking loans last September to buy store cattle which they reared during the winter. Prices have plummeted and the farmers are faced with severe shortfalls in projected income.

The impact is most severe on farmers who borrowed a large proportion of the money used for buying in stock last autumn. However, banks say they only advance around 50 per cent of the cost of restocking.

Bankers say that for those who put a large amount of their own money into restocking, the impact will be painful but bearable. The luckier farmers are those who have either off farm incomes or are engaged in mixed farming.

Farmers now face a relatively quiet period as very little slaughtering takes place during the summer. Bankers say this is taking some of the pressure off farmers for the moment.

One of the problems for farmers has been that they could not afford to defer selling their animals for long in the hope that the market would recover.

Holding on to cattle adds to feed costs and allows the animals to get fat for which the producer is penalised.

"Only 15-20 per cent of beef produced here is sold domestically," said one source, "therefore we are very, very exposed when there is a hiccup on the international market".

Various estimates conclude that beef consumption is down by around 30-35 per cent across the EU. Prices per pound are down from around £1.08 to below 80p. "It is estimated that the total loss of income for all farmers selling livestock is £200 million," says one banker.

The average loss of £150 per animal is calculated as follows the drop in price which the animal is now fetching, the loss of condition of animal where the farmer held on to it hoping that prices would recover and the cost of carrying an animal which is about £10 per week.

"Teagasc has been advising farmers to sell beasts as they become fit," said another banker, "and the overhang in the market seems to have been cleared now."

The banks say they will begin to take a more proactive approach to their farming clients over the coming weeks.

"Farmers are a lot more clued in than they were during the last land crisis, but unfortunately many tend to think the problem will go away and they defer taking any action, says one banker.

The effect of the crisis is trickling down the line and calf prices are beginning to fall back, say bankers. It all points to a leaner industry in the future for those engaged in beef farming.