Updated: 05/04/17 : 12:16:11
President Joe Healy today (Wed) announced the key principles the
Association will apply in dealing with vulture funds in support of
farmers with credit difficulties, as well as a strengthened
farmer support network to deal with individual credit cases.
farm leader said that he wanted to send a strong and clear message that
anybody who tries to take on farmers who are genuinely attempting to
resolve their credit difficulties is taking on the IFA.
Healy said, “Vulture funds want to exit the Irish market in a very
short timeframe of three years or less. This is unacceptable, as it
leaves absolutely no scope for the borrower
to propose a medium or longer term solution.
funds are taking a short-term and ruthless approach to farmers whose
loans they have acquired. We cannot have a situation where farmers could
be forced to sell their land when restructuring arrangements would
allow them to pay off their loans over time.” he said.
IFA President set out five key principles on which negotiations must be
carried out, where the farmer is willing to engage in a reasonable way
to reach a solution. “There is a fear of the
unknown among the farming community. I want to reassure farmers with
credit difficulties that IFA will provide strong support to help them to
reach a sustainable solution.”
The IFA principles are:
forced sale of farming assets, which undermines the viability of the
family farm, and where the farmer has meaningfully engaged to find a
Full and final agreement must be reached between the borrower and loan owner prior to the disposal of any assets.
Assets must be sold for their full market value and with proper advertising.
No forced collection of debt that is not yet due.
delays in arriving at a decision are due to the loan owner’s actions,
there can be no interest or penalty accumulated on the outstanding debt
in that time period.
IFA Farm Business Committee is also strengthening the IFA’s support
network to assist individual farmers in trying to resolve credit cases.
Farm Business Chairman Martin Stapleton said that this will consist of a
team of farmers who have experience in dealing with credit cases.
IFA Credit Helpline is
1890 924 853.
said, “The number of cases involving credit difficulty that will come
to a head in the next year or two is set to increase. We are encouraging
farmers to seek assistance and to engage as early
as possible. To loan owners, we are very clearly saying that IFA is
standing strongly behind and directly supporting farmers to find a
sustainable solution that protects the family farm”.
Engagement with Government
has written to the Minister for Finance outlining its concerns on the
damaging impact on, and threat to, family farms resulting from the
purchase of distressed farm loans by vulture funds
in recent years.
has proposed that the funds that have purchased loans must be
regulated. The Financial Regulator can only have proper oversight if
they have information on the loan owners, the number of loans
they own and the profile of borrowers. IFA also believes that farmer
and other borrowers should be allowed to engage directly with the loan
owners, and not operate through third party agencies only.
has identified that there must be some means whereby information on the
actions of these funds can be made publicly available, through
IFA has sought a stronger, and public, Government commitment to
rebalancing the power between borrowers and loan owners.
Background to situation
collapse of the financial system led to a number of banks exiting the
Irish market, while others have sold some of their loan books to third
parties as part of their restructuring process.
Since 2015 in particular, there have been a number of loan sales that
have included farm debt. As part of their ongoing restructuring
processes, there is concern that other institutions may sell off some of
their loan books, including farmer debt, in the coming
sector with the lowest share of performing loans transitioning to
default has consistently been the Primary (PRI) sector, composed mostly
of agricultural loans,
where roughly one per cent (1%) of performing loans enters default each
Central Bank SME Market report 2016 (H2).
Primary sector is also shown to have the highest share of defaulted
loans transitioning back to performing status (7 per cent in the most
Total debt outstanding by the agriculture sector at the end of 2016 was €3.4bn (Source:
Central Bank Credit Advanced to Irish Resident Private Sector Enterprises, Sept 2016).