“A lot of the stress related to farm debt comes from the fact that people can’t see any options,” says IFA farm business chair Martin Stapleton. “When you can see choices, the very fact is that you can begin to take control of the situation. Seeking outside assistance is an important first step.”

Stapleton, a dairy farmer from Limerick, believes there are more than 2,000 significant farm debt cases. “We have seen a rapid increase in the number of cases coming to us in the last 12 months,” he says. “We are expecting that to increase further.

“The policy for this country for five or six years was to sort out the big [€5m plus] debts, now debt difficulties in the next group – the under €5m category – are being tackled.”

Stapleton places these debt cases in the overall context of the sector. “Irish farmers currently have over €3.5bn borrowed, with the lowest proportion of defaulting loans among small businesses. That is reflected in the rates and terms of borrowings farmers receive,” he says.

“The big picture here is that every year thousands of farmers borrow money and pay that money back. The IFA must ensure that farmers have access to capital at the lowest possible rates, that’s why we proposed the low-interest loans, which we now want extended.

“Farmers who get in financial difficulty deserve at the very least, that their association will be available to assist them. Our service is completely confidential, it is professional, and, where there is full engagement, can succeed in achieving a final settlement, to allow the farmer and their family get on with their lives and their work. That settlement must be based on the capacity to repay.”

He cautions farmers to be very careful as to whom they put their trust in. “The earlier you engage, the more options you will create. Waiting and doing nothing and paying nothing, as some are advising, is not a wise strategy, in my opinion.”

Asked his view is of so-called vulture funds, he says: “They want, by and large, to buy and then sell a paper asset, and get out of here as fast as they can, within three to four years. That brings extra pressure on the people whose loans are now with these funds. It also brings opportunities, and I think we shouldn’t lose sight of that fact. Someone who wants to deal in a hurry can be better to deal with than someone who believes that getting everything back is more important than when they get it back.”

Stapleton has a clear response to the question of why some people should be given a debt write-off when most pay to the last penny. “There is no charity here, no free ride. The farmer must be willing to pay the debt that they can afford to pay – the IFA definition of meaningful engagement.”

Stapleton says the key is repayment capacity, including the sale of non-core assets, and other financing options the borrower proposes. Ultimately the aim is to leave a viable farm enterprise, which is in everyone’s interests.

Principles of negotiation

Martin Stapleton’s advice is to tackle the problem one stage at a time.

Firstly, recognise that you have a problem on your hands. Don’t carry the burden on your own, seek out help and engage openly.

With your advisers, prepare a proposal to tackle the debt. Then negotiate with the loan owner on the basis of that proposal.

Achieve a full and final settlement. Then take the steps necessary to honour your side of the agreement.

“The IFA has built up a tradition over the last 35 years that when we put an honest proposal to a bank on behalf of a farmer, that is accepted as such,” Stapleton concludes. “The good name of the IFA is key to negotiations with banks, and it must be maintained. We expect farmers who enter into these agreements to honour them.” Some farmers decide to go the legal route, which of course is their entitlement. Such people tend to either win big or lose big,” Martin adds. “We in the IFA do not involve ourselves in that process. Our place on the pitch is to assist in negotiating an agreed settlement.”

The five IFA principles are:

1. 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.

2. Full and final agreement must be reached between the borrower and loan owner prior to the disposal of any assets.

3. Assets must be sold for their full market value and with proper advertising.

4. No forced collection of debt that is not yet due.

5. Where 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.

  • The IFA Credit helpline is 1890 924853. A team of voluntary senior IFA members are assisting the committee, with professional advisors both internal and external