IFA on war footing over vulture fund forced sales

Valerie Cox on the characters who made the Ploughing Association warns investment funds will face more protests if they fail to engage on farm loans

A NATIONWIDE battle on farm debt is brewing, with the IFA warning that it will strongly support landowners who are facing forced sales by vulture funds.

Any farm family threatened with a forced sale will receive the full support of the IFA as long as there is “a willingness and an ability to pay down the outstanding debt”, the association stated.

The IFA confirmed that the protest tactics used in supporting the McCann family in Meath — who last week faced a forced sale of their 59ac farm by a vulture fund — would be repeated in similar cases.

A subsidiary company of the Cerberus vulture fund acquired the McCanns’ loan from Ulster Bank and placed the farm for sale on the online bidding site BidX1.

The holding near Trim was described as being in vacant possession even though it is being actively farmed by the McCanns.

In response, the IFA placed posters around the farm effectively warning off potential buyers.

It stated that buyers of farms for sale in these circumstances would not have the “goodwill” of the wider farming community.

BidX1 have now removed the McCanns’ lands from their site and are no longer offering them for sale.

IFA farm business chairman Martin Stapleton welcomed the move by BidX1 and also called on vulture funds to engage directly with the IFA and farmers to resolve debt issues.

“Farmers have to be given a fairer period of time to repay their debts. IFA is sick of dealing with endless intermediaries on behalf of these funds.

“It is time for them to put faces to their company and sit down with IFA and try to resolve cases,” he said.

It is estimated that up to 2,000 farms are among thousands of loans that have already been sold, or are to be offloaded by the banks to vulture funds.

Mr Stapleton said the IFA would oppose forced farm sales where the owners are willing to implement a credible solution to their problems.

“In most cases, the sale of a noncore asset, plus a term-loan, is good enough to restructure the debts,” he said.

He acknowledged that there were instances where no repayment capacity existed and farm sales were unavoidable, but said these situations were in a minority.

Alternative

“Vulture funds have no understanding of family farms and they are focused only on getting their money.

“It is not acceptable for vulture funds to force a sale of land and cash in debts they have bought from a bank when there is a viable

alternative,” Mr Stapleton pointed out.

The IFA was not helping people avoid debts, but where families had encountered unforeseen difficulties they were entitled to the opportunity to restructure loans, said Mr Stapleton.

“When there is a family willing to sit down and work out a schedule of payments, our banks cannot do a ‘Pontius Pilate’ and wash their hands of customers that they were happy to deal with in better circumstances.

“They have a responsibility to their customers, and offloading them to a vulture fund is in itself a recognition of a system failure on their part,” said Mr Stapleton.

Meanwhile, insolvency specialist Gary Digney told the Farming Independent that the current protection offered to family homes against vulture funds under the Personal Insolvency Act 2012 could be extended to the family farm.

“In cases where a farm is about to be repossessed or sold, a personal insolvency practitioner can apply for a protective certificate to allow time for a proposal to be put forward,” said Mr Digney, a director with Dublin-based PKF-FPM Accountants.