Protests as family farm put up for sale by vulture fund

Two Co Meath brothers are faced with losing their livelihoods as their active 38-acre farm has been put up for sale by a vulture fund.

Protests as family farm put up for sale by vulture fund

By Joyce Fegan

Two Co Meath brothers are faced with losing their livelihoods as their active 38-acre farm has been put up for sale by a vulture fund.

Gerry, 45, and Michael, 39, found out two weeks ago from a neighbour that their farm was for sale on an online auction site.

The McCann brothers’ farm is listed online as a “ vacant possession”, so whoever is to buy it would be expecting an empty site. Instead it is home to a busy farming operation. Farmers have come together to say they will not co-operate with whoever buys the farm, therefore rendering it useless to an outside buyer.

Earlier this week protests took place at the farm. On Wednesday farmers gathered in Co Meath, holding printed placards that read “No forced sale of this land,” alongside the IFA logo.

Another homemade sign read: “Family farm, not for sale, no vultures.”

The brothers paid over €1m for the 38-acre farm holding in 2008, borrowing €800,000 from a bank to do so.

Gerry also had a furniture business which hit hard times in 2010, and it was at this point that the bank loan for the farm began to fall into arrears. However, up until then, the brothers had managed to reduce the outstanding debt to about €650,000.

Since 2010, as a result of arrears and penalty interest rates, the outstanding debt crept back up to €800,000. Both brothers took various actions to try and repay the loan in the last number of years — these included selling a family home, remortgaging another family home, and selling a site on the farm.

Two years ago their bank sold the loan to a vulture fund. The brothers have continued to run the active farm where up to 300 goats are milked daily.

Michael, left, and Gerard McCann at the family farm in Readstown in Co Meath. Picture: Finbarr O’Rourke
Michael, left, and Gerard McCann at the family farm in Readstown in Co Meath. Picture: Finbarr O’Rourke

Six months ago Gerry and Michael contacted the Farm Business Committee of the Irish Farmers’ Association (IFA), which helps members in several ways, one of which is when they run into credit difficulties.

The IFA assessed the brothers’ situation and is opposed to the sale of their farm as they argue that Gerry and Michael have the capacity to make repayments.

“Why we backed the McCanns is because they came to us and we have a system in the IFA, where we have four voluntary officers and a professional consultant that farmers in financial trouble can talk to.

“We went through their books, looked at their debts, their assets and their repayment capacity and we put a proposal together.

“A proposal is put together when there is a means to reduce the debt and make it sustainable and this was the case with the McCann brothers,” said Martin Stapleton, chairman of the IFA’s farm business committee.

This proposal was then given to the asset management company appointed by the vulture fund, but it was rejected, as they wanted an immediate pay down on all monies owed.

“As it stands, vulture funds, because they’re not banks, have neither the right nor the obligation to contact the borrower, so they must go through an asset management company,” said Mr Stapleton.

As the proposal was rejected, the land was put up for auction on an online site for €250,000, despite it being purchased for €1,050,000 and there being a loan of €800,000 outstanding on it.

“If the vulture fund is successful in selling their entire farm then the livelihood of two brothers will be destroyed.”

“They have a successful goat enterprise on their farm, milking 300 goats a day, and this is milk that is being sold in every supermarket in the country. They have the capacity to make repayments,Mr Stapleton told the Irish Examiner.

Furthermore, a 20-acre farm, which was used as security for the loan in 2008, to buy the goat farm, is also being sold in the online auction for a price tag of €160,000.

Both actions are due to close online next Thursday.

The IFA estimates that there are hundreds of farmers around the country in similar situations and new regulations around asset management are urgently needed.

The organisation has been lobbying the Government about this for two years now.

“We estimate that there are about 2,000 farms that are compromised by bad debt that is being called in and it’s due to the legacy of the Celtic Tiger, not cashflow issues or bad weather, this is serious, serious debt as a result of the Celtic Tiger,” said Mr Stapleton.

“With our volunteers on the committee, we are having between 10 and 12 meetings with individual farmers on this issue each week. This is backed up by staff in the IFA office. We have been contacting the Government about this for two years,” he added.

The chairman said the issue all “boils down to” what solutions, in the way of new regulations, politicians are “willing to entertain”.

“If there isn’t any new regulation brought in, what happened this week (in Meath) will become commonplace. The centre can not hold,” Mr Stapleton said.

He is realistic about the fact that Irish banks need to tidy up their books when it comes to bad loans, and that there is debt that is so unsustainable that no amount of restructuring will reduce it. He also admits that “strategic defaulting” cannot be accepted either.

However, Mr Stapleton, said most farmers in this situation have the capacity to make repayments and therefore should not have their entire farms sold from under them.

“The majority of the farmers we’re dealing with are in the position where they should be given choices as they have the ability to repay and this can be done through the sale of some assets and the restructuring of loans,” he said.

The IFA is hoping the auctions will be called off next week and that the latest debt repayment proposal plan offered on behalf of the McCanns is accepted.

The Irish Examiner contacted a spokesman for the fund that owns the McCanns’ loan, but did not receive a reply yesterday.

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