Creditor actions are leading to increased use of garnishee orders to freeze farmers’ EU payments, ICSA rural development chairman Seamus Sherlock has warned.
The farmer group has expressed deep concern in relation to family farm debts due to creditors’ use of these orders, which typically provide that EU payments owed to farmers by the Department of Agriculture can be frozen in favour of the creditor.
The ICSA says the process is stacked in favour of the creditor, who can get the order without giving the debtor a chance to state his case in the first instance, and the only option available for the debtor is to appeal to the courts.
“Garnishee orders can also be applied to other monies and payments available to the debtor but EU payments due to farmers are the most obvious and straightforward target in most cases,” said Mr Sherlock.
“It is a ruthless process which is more prevalent in the face of widespread debt issues on Irish farms. The problem is compounded by farmers who are under immense stress and tend to put their heads in the sand rather than facing up to the difficulties.”
He said the granting of a garnishee order can compromise the viability of a farm, with potentially devastating impact on cash flow, such that the farmer is less likely to be able to trade his way out of difficulty.
“We are actively encouraging farmers to face up to their situations sooner rather than later,” said Mr sherlock.
“Farmers should seek professional advice and guidance and try to reach a sustainable settlement with creditors.”
The ICSA is calling for a more balanced approach to debts on both sides.
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