I move: "That the Bill be now read a Second Time."
I apologise for the absence of Deputy Mattie McGrath. He genuinely wanted to be here this evening but is unable to be with us. He has put a great deal of work into this Bill, along with others, as I will explain. The Deputy sends his apologies.
This Rural Independent Group has the overarching objective of protecting the family farm and the linked family home from the ruthless and speculative practices of vulture funds. We believe this Bill is innovative and clear-cut. This legislation, if passed, would give solid protections to family farms and family homes from ruthless vulture funds, while also providing low-interest loans for farmers. This Private Members' Bill is sponsored by the six Rural Independent Group Deputies and it was carefully crafted by the former Master of the High Court, Mr. Ed Honohan. We acknowledge the tremendous work carried out by Mr. Honohan and Brian O'Reilly. I thank them for their sterling service. I also thank Brian Ó Domhnaill and Máiread in our office and all those in the Gallery who played some part in this Bill.
Farms are being repossessed in rural Ireland and lands that have been in families for generations are being sold off by vulture funds. Some banks are selling off agricultural debts to multinational property asset companies, which subsequently demand immediate payment of moneys owed. Fears are growing that an entire generation of farmers could be wiped out, thereby stalling hopes of a sustainable rural recovery. Vast tracts of land 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. The stress and anxiety experienced by these farmers have led to countless suicides. My colleagues and I have often highlighted the number of suicides directly linked to the financial pressures arising from banks and financial institutions chasing their debts.
In the absence of the Government coming forward with strict legislation to regulate vulture funds, the activities of which will wipe out a generation of farmers, we have crafted this Bill to address the problems. The current situation cannot continue. We are seeing young people lose interest in farming when they see the stress and anxiety their parents are suffering. If this continues, it will spell the destruction of rural communities and be a further drain on the mental health services.
All banks are acting in a manner that is not acceptable in piling stress and misery on embattled farmers. They are destroying viable farms and undermining the recovery in rural areas. Another serious issue emerging is the refusal of banks to release sites to the sons or daughters of farmers who are paying off a loan. For too long, the Government has facilitated vulture funds and banks to seize and sell family farms. This Bill would create a policy platform to tip the scales back in favour of landowners and farmers and is all about protecting the small man or woman against predatory financial institutions. The agrifood sector and the role of farmers in the Irish economy is of systemic importance and is generating gross value added equating to €14.4 billion a year. Furthermore, the sector employs one in every ten workers in the State.
Farmers are under attack from all quarters. First, the Government is targeting deep cuts to farmers’ ability to earn a living through climate action reductions and an inadequate new Common Agricultural Policy, CAP. Second, banks and vulture funds continue to seize and sell off family farms all over the country, with Government policy stacked in favour of these institutions. We have observed at first hand the destruction and crippling impacts these forfeitures have caused to families and rural communities. This is why we have brought forward this imaginative new Bill. It is well known that international vulture funds are a massive threat to many Irish family farms and linked family homes. Unfortunately, the Government has allowed those faceless funds to destroy families by seizing and selling viable family farms.
Our Bill would limit these merciless practices and tip the scales back in favour of farm families by delivering legislative protection against the predatory practices of vulture funds and financial institutions. For example, recent figures from the Irish Farmers Association, IFA, have estimated that between 2,500 and 3,000 family farms may be in danger of seizure by vulture funds, with the total amount of land involved being up to 150,000 acres. However, the number is likely to be even higher than this, particularly as we enter a high interest rate environment which will place greater financial pressures on all borrowers, including farmers. Therefore, this is a very serious threat to all rural communities, and we believe this Bill provides a genuine legal framework to put ordinary people first by at least giving them a fairer level of legislative protections.
Vulture funds do not operate in the open. Instead, they use little known corporate entities to avoid open scrutiny and adverse publicity. The Government has facilitated this practice by allowing these funds to seize and sell off family farms all over the country. The reality is that in the years to come vulture funds will be closing in on hundreds of farms. This is due to legacy debt and the sale of mortgage portfolios to global funds by pillar banks. An example is the exiting transfers from Ulster Bank and KBC. This will result in these funds scooping up indebted properties, unless legislation, such as this Bill, is passed.
The vulture funds' primary interest is in the assets, not the debt. We know these funds are attracted to the agricultural property and lands that secure debts. Farmers are now struggling to get loans from other banks to pay moneys back to the hedge funds and some are being left with very few options. This is why our Bill also provides for a State-backed, low-interest loan scheme for farmers. Ireland’s banking cartel of Bank of Ireland and Allied Irish Banks do not understand the pressures farmers are under. To be honest, these banks do not care. They operate a system whereby if people fail to pay, they lose. Unless proper laws are in place to protect these people, there will be a free run for the vulture funds.
Farm families are being terrorised by these funds. It is simply not acceptable for the State to allow vulture funds to force the sale of land that has come as security with a debt bought from a bank when there are other viable alternatives.
The laws are stacked in favour of the funds, as we have observed first-hand on many occasions. That is why we have brought forward this imaginative new Bill. My colleagues and I in the Rural Independent Group, in conjunction with the former Master of the High Court, Mr. Ed Honohan, are confident that if this Bill were passed into law, farm families would be given the best possible legislative protection against the speculative practices of vulture funds and receivers. We strongly encourage all Deputies to join us and vote in favour of this Bill. In reality, to vote against this Bill would be akin to protecting the rights of the vulture funds over the interests of the family farm.
This Bill would also pave the way for a new State-run institution that would extend low-interest credit to all farm enterprises. It would be a paradigm shift, allowing access to capital and credit in rural Ireland, boosting the entire rural economy and pivoting regional development in the process. This Bill provides a new approach to credit and impaired credit which is unique to the farm enterprise. Therefore, it is hoped the Government will accept the genuine spirit in which this Bill is tabled and work with us to progress it through this House and on to the next Stage, Committee Stage. Naturally, we would be happy to work with the Government, or anyone else for that matter, and would welcome amendments on Committee Stage.
Likewise, we invite all stakeholders to engage in a searching reappraisal of the current dysfunction in the banking model as it applies to Irish agriculture. For instance, in other countries, farmers have access to low-cost or almost zero-interest loans. In Ireland, our farmers are at the full greedy mercy of high-interest loans from banks. We fully expect that the usual gang of anonymous and highly paid banking lobbyists will beat a path to the doors of any Minister or Government Deputy who might appreciate a briefing on the measures in this Bill in a desperate attempt to block or delay open discussion to protect the interests of the banks. The defining outcome of those lobbying efforts will rest in whether Government Deputies will vote in favour of this Bill when a vote is called. Shadowy figures from the banking world should not be allowed to derail this Bill because it challenges their profits margins. Rather than the usual behind-closed-doors lobbying by the banking elites, we invite and strongly suggest that all those individuals and institutions should come on the record and direct their observations to the relevant Oireachtas committee during Committee Stage deliberation of this Bill, where they can be the subject of constructive analysis. It would be nice, for once, to hear a Minister undertaking to put on the record of the House a full record of all comments he receives - front door or back channel - when it comes to this Bill. Such an undertaking might be the key to open and transparent debate. That is why we invite all Deputies will take a brave step and support this Bill, on Second Stage and beyond.
In drafting this Bill, we were drawn to remarks made by the renowned professor of economics at Princeton University, Dr. Atif Mian, which strongly criticised the Irish Government's policy which favours the interest of banks and vulture funds over the best interests of borrowers. Professor Mian has said that Ireland's "harsh, creditor-friendly laws" meant that households were bearing too much of the burden of strict mortgage rules and that it would be better for the economy if people could get out from under their debts more easily.
The potential of interest rate increases coming down the line will have a very substantial impact on people in arrears, as the interest will accumulate faster, and will likely also increase the number of people falling into mortgage arrears. All in all, this represents a serious hangover from the financial crash that has not been addressed by any government over the past decade.
It is important to remember that agriculture is a work in progress at any point in time. The common good is best served by keeping Irish land in the hands of Irish farmers rather than giving it over to banks and vulture funds. Food security issues are also in play but the nation's lands, as the sovereign asset, must be shielded against disinterested speculators. For instance, section 12 of the 1965 Land Act will filter all land transfers through the Minister's hands, and his scope of discretion within EU principles is more extensive than might at first appear. There may come a time, as an alternative option, for example, when farmland threatened with foreclosure and with no prospect of farm debt settlement arrangement, for whatever reason, must be optioned to the State, rather than sold to a foreign vulture fund, to be returned to full State ownership but under the stewardship of the farmer prepared to manage the lands to benefit the environment through biodiversity and even rewilding.
This Bill would not be possible without the exceptional and invaluable voluntary contribution of the former Master of the High Court, Mr. Edmund Honohan. Mr. Honohan's first-hand knowledge of the difficulties faced by farm families and his exceptional legal expertise have been instrumental to the publication of this Bill. My colleagues and I in the Rural Independent Group are very pleased the Bill is before the House. Earlier in the year, we held a parliamentary briefing session in the audiovisual room, to which every Deputy was invited, to inform all Members of the Oireachtas about the merits and objectives of the legislative provisions. That session was addressed by the former master, Mr. Honohan. We sincerely hope all Deputies will join us and fully support the Bill and the farm families it seeks to assist. After all, without substantial local agriculture in local ownership, the towns will be blighted and rural Ireland will continue to decline. For far too long, the pillar banks have used and abused the farming sector in this country. Our Bill would pave the way for a new State-run institution that would extend low-interest credit to all farm enterprises in a specialised manner. It would be a paradigm shift, allowing access to capital and credit in rural Ireland, boosting the entire rural economy and pivoting regional development in the process.
There are four main objectives of this Bill, including a moratorium monitored by a receiver. During the moratorium, the receiver will not be permitted to negotiate the sale of the security or place the farm on the market, and farming will continue as usual. The Bill provides for an effective legal moratorium. After the moratorium, a farm debt settlement arrangement will be subject to court approval, and the personal insolvency arrangement, PIA, section 115A veto override will be open to the court, which would allow the borrower to hold on to the farm after an appropriate discharge of structured debt.
Second, the farmhouse would be an excluded parcel, with the division of the collateral into two parcels - the farmlands and the farmhouse. The Bill provides for the debt to remain charged on both but, crucially, the code of conduct on mortgage arrears, including the mortgage arrears resolution process, MARP, will apply to the farmhouse. This will give the family home legislative protections under the code of conduct on mortgage arrears process and the MARP.
Third, the inactive co-borrower, often the wife, is protected. The co-owner can sometimes be casually involved as a co-borrower, although not a farmer. The law currently offers little protection. The spouse's version of events is usually undocumented, and the banks' formal files are rarely opened to the court. With the presumed admissibility of these hearsay records as evidence of the truth of the record, since the Oireachtas passed the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020, the scales of justice favour the lender if there is a factual dispute. Where a fact is presumed, it cannot be disputed.
The fourth is the proactive measures to secure the future. Often, difficulties in predicting the impact of anticipated shocks, for example, Brexit, CAP reform, climate and weather extremes, make formal risk assessment for credit to the farming sector a matter of guesswork, but the sector will need more credit. Standard intermediation or traditional bank lending will not be enough to protect the long-term future of Irish agriculture.
We believe that the State has an opportunity to create cross-Border access to liquidity pools that cater for investors, including, in particular, ESG funds, at competitive rates. The National Treasury Management Agency, NTMA, can offer such funds credit default swaps. This would allow the State to establish a new State-backed bank for the agriculture sector that can offer farmers low-cost loans.
