ACC in IFA talks to stop debt-laden farmers going under
Published 20/06/2011 | 05:00
Personal Finance Editor
ACC BANK has admitted it is prepared to do a deal with heavily-indebted farmers to avoid them going under.
The bank is prepared to consider freezing interest payments and reducing interest charges, it said. This follows an admission from Bank of Scotland/Halifax earlier this year that it will do deals with indebted businesses and households, while AIB has said it is considering debt forgiveness measures for homeowners.
ACC and the Irish Farmers' Association (IFA) have been involved in protracted negotiations for weeks to hammer out new ways to deal with farmers' debts.
The aim is to ensure that farmers sinking under a sea of debt are able to keep their farms intact.
Banks are keenly aware they have few options but to do deals with heavily-indebted farmers, as any attempts to repossess farmers's assets will meet fierce resistance.
IFA farm business chairman James Kane said it was important that farmers unable to meet their bank repayments were not forced into fire sales of assets.
"It is vital that where there is a need to dispose of non-core assets, the farmer does this himself, by agreement, rather than by force," Mr Kane said.
Many farmers are struggling with unmanageable debt due to off-farm investments or because they bought land at the top of the market.
Farmers and the ACC are keen to take a long-term approach to dealing with non-farm debts.
It is understood the talks centre on ways to freeze payments or interest on assets that are not a core part of the farm, until they can be sold in an improved market.
"This will maximise the amount that can be cleared off the debt and will maintain the co-operation and goodwill of farmers," Mr Kane said.
A spokeswoman for ACC Bank confirmed the talks were ongoing on ways to help over-indebted farmers deal with the situation.
"Like many banks, ACC Bank has discussions with a variety of farming organisations on an ongoing basis," she said.
But it stressed that no one solution will work for every individual farm business.
"ACC Bank will continue to work with clients who find themselves in difficulty on a case-by-case basis and normal bank credit policies, as always, will apply."