‘Ugly scenes will manifest if vulture funds start selling off family farms’
ICMSA President, John Comer said ugly scenes will manifest if vulture funds start selling off family farms over the next year or two.
Speaking on RTE Radio One this morning, Comer said it is ingrained in all Irish citizens to be repulsed by people being thrown out of their businesses, homes or farms.
“They [vulture funds] would be making a mistake if they felt there was going to be no resistance,” he said.
The ICMSA leader said that the prospect of vulture funds purchasing farm loans has caused quite a lot of distress and anxiety as in many cases farmers are dealing with unknown entities.
“There has been a lot of representation made to our office in Co. Limerick looking for advice on how to proceed.
Obviously, the individuals involved were in a distressed situation anyway but this has added insult to injury.
“People are finding themselves in a situation where they don’t actually know who they are dealing with,” he said.
Farmers have no point of contact with vulture funds, he said, and many struggle to realise why banks would sell of these loans when other options may have been available.
Comer added that the ICMSA has meet with all the pillar banks with an overall policy that the organisation does not want to see a repeat of ugly scenes where family farmers are sold in this manner.
Also speaking, financial and debt resolution advisor Matt Carey said vulture funds have emerged in the banking sector in recent times, and he added that there is very little opportunity to engage with the loan service providers.
“You are looking at a very difficult situation in terms of bringing forward a resolution.”
Carey said that there are only two ways of finding a solution.
The first one is you can get a loan refinanced, that’s a possibility nowadays, but you have got to be able to demonstrate that you have sufficient cashflow to service the new borrowing.
“The only other solution is to divest the asset and in a farming context the asset is intrinsically linked with the income. So once you sell the asset, the income diminishes,” he said.
Carey also made it clear that he expects the number of farms to come under the control of vulture funds to increase in the future.
Meanwhile, ICSA Rural Development Chairman Seamus Sherlock has called on farmers not to be panicked by the issue of private equity firms or so called vulture funds.
In a statement, Sherlock said the ICSA is well aware that 200 farm loans had been sold to Cerberus and the association has already held talks with senior management from Cerberus on this issue.
ICSA has received assurances that all strategies where family farms are concerned will be explored.
“ICSA has also met with the Central Bank and the Financial Ombudsman in relation to this issue. From day one ICSA has led the way in supporting farm families who find themselves, sometimes through no fault of their own, in this predicament.
“Many farmers are now faced with trying to secure a resolution with fund managers instead of their traditional bank and ICSA’s aim is to smooth the road to an agreed compromise between the farmer and the new owner of the loan.
“I would encourage any farmer who finds themselves in this position to contact ICSA,” he said.