VULTURE FUNDS ARE prepared to sell out the farm over the heads of the farmer.
Fears are growing among an entire generation of farmers that their farms could be sold from under them, according to the Irish Farmers’ Association (IFA).
The group who represent farmers is getting tough on vulture funds, stating that they want to send a strong and clear message out that anybody who tries to take on farmers who are genuinely attempting to resolve their credit difficulties is taking on the IFA.
The number of farms in credit difficulty that will come to a head in the next year or two is set to increase, according to IFA Farm Business Chairman Martin Stapleton.
The family farm
He explained that unlike any other small or medium business, farmers use the equity in their land to invest in their farm – farms that have been in the family for decades.
“Farmers are at their wit’s end. The people in these positions are going through the most emotional stress because they feel their life is being destroyed. The threat of losing the family farm, the family home, is too much to take,” he said.
“Vulture funds want to exit the Irish market in a very short time frame 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,” argued IFA President Joe Healy.
“These 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.
Stapleton said farmers just want to pay their debt in the long-term rather than the short-term, but vulture funds won’t accept that.
The fear of the unknown
“Stress is the hardest thing to quantify, but farmers in this situation are more stressed over the fear of the unknown,” he added. The issue has been raised in both the Dáil and Seanad in recent weeks.
Senator Frances Black said stress and anxiety experienced by farmers in this situation has led to countless suicides. “We need to highlight the number of suicides that are directly linked to financial pressures from banks and financial institutions chasing their own debts,” she said.
The activities of these vulture funds will wipe out a generation of farming. Young people lose interest in farming when they see the stress and anxiety that their parents are suffering.
It will spell the destruction of rural communities and lead to a further drain on mental health services. Banks are acting in a manner that is not acceptable, and they are piling stress and misery on embattled farmers.
Farms that have been in families for generations are being sold off to vulture funds, she said, calling on strict legislation to govern vulture funds.
Losing your land, home and income
“Some banks are selling off agricultural debts to multinational property asset companies which subsequently demand immediate payment of monies owed. Fears are growing that an entire generation of farmers could be wiped out, stalling hopes of a sustainable rural recovery. Vast tracts of lands are now in the hands of vulture funds and farmers are under immense pressure. When farmers lose their land, they not only lose an asset but also their income,” said Black.
In a bid to tackle the situation, the IFA has set out a framework for negotiations with vulture funds, which calls for no forced sale of farming assets which undermines the viability of the family farm, and where the farmer has meaningfully engaged to find a workable solution.
The group called for a full and final agreement to be reached between the borrower and loan owner prior to the disposal of any assets, adding that assets must be sold for their full market value and with proper advertising.
Legislation to regulate
While the IFA have outlined their key principles, Sinn Féin’s Pearse Doherty is calling for new legislation to be introduced to regulate vulture funds.
The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2017, which was moved by Doherty in the Dáil during the week, unopposed by government, could subject vulture funds to regulation for the first time.
“In the past few years, banks have sold on the debts and mortgages of homeowners, small businesses, and farmers to unregulated vulture funds.
“The vultures are wreaking havoc on our economy and communities. The policy of empowering them must be stopped,” said Doherty.
“There is still no regulation in place for the actual owners of the credit. The companies they appoint to deal with consumers are regulated, but that approach has been criticised by the Central Bank and has proven inadequate,” said the Donegal TD.
He called for cross-party support, adding that it was time to send out a message that “there will no longer be a free hand for vulture funds”.
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