An outspoken figure, Mr Honohan has attracted much attention in recent years for his criticism of financial institutions over their dealings with debtors.

He tells the Farming Independent his interest in the treatment of borrowers by financial institutions was heightened after the Crash.

“Prior to that, most people weren’t even aware that loans were being securitised. Nobody really understood what that meant. They had a vague idea that the bank didn’t actually have that type of money in its deposits.

“What the banks were doing was saying, ‘we’ll give you a mortgage, you’ll sign over the house to us and we will, in turn, re-mortgage that to a finance source — it could be a hedge fund in New York or pension funding in the UK or in Holland or other salubrious entities.

“The banks basically were flipping it. This was the cause of the huge spiral of price inflation in housing.

“Of course, everything was fine until the house prices crashed. Then there’s an argument about who is going to recover the collateral.

“All this I could see emerging as Master looking at the files. You’d see patterns emerging very quickly.

“You wonder whether or not the marketplace was working to everybody’s benefit equally, whether or not some people were profiting to an extent which wasn’t really equitable.”

Although not a judge, Mr Honohan had a quasi-judicial position in the legal system. He ensured correct procedures were followed and paperwork was in order before sending the matter on to the High Court.

Many of the files he dealt with involved agricultural land and family farms, and he believes new legislation is needed to underpin the special nature of the sector.

“Why bother with agriculture?” he asks rhetorically. “Because there was an awful lot of distress. People were coming to me with anecdotal stories of suicides, and so forth.

“You go out of your way to see if you can find a glimmer of hope in any case. Is there something worth exploring, is it worth putting the case back to allow further matters to be looked into?

“In other words, to give the defendants the idea that the totality of the relationship between themselves and the bank is made known to the court, and the court can make its own mind up.”

Mr Honohan believes that there is a mismatch between banking, as we now know it today, and agriculture, as we now know it.

“For donkey’s years, the banks dealt fairly with farmers. ACC was set up to give them credit... they were also very supportive and understanding of the seasonality of the agricultural business.

“In addition, you had that understanding, if you like, the honour system with banks.

“There would be a tacit understanding that things were pretty flexible, and a long-term view was taken of the viability of a particular farming enterprise. It was really very practical and personal.”

However, after the banking collapse in America, “the banks ran for cover”.

“They said, ‘oh, gosh, we’re in trouble here. That honesty system is gone — we’re now going to stick people with the letter of the transaction that they signed’.

“And there’s no way that the banks are going to concede that there was any kind of tolerance built into the transaction,” Mr Honohan says.

“There was an element of the banks dealing with the farmer up to a certain point, and then they’d say ‘to hell with this, we’re selling the loan to somebody else’.

“So you’ve then got hedge funds and alternative investment funds, all of whom are keen to tap into cash flows… they don’t want to know about the business of the farm…

“They say, ‘look, you signed on the dotted line… we bought the loan from the bank, you now must refinance or give us the land’.

“So there was a loss of the ‘neighbourliness’ of the credit system with the farmers and the loss of the honour system as well. So we have a situation where farmers are left high and dry.”

Among the provisions of Mr Honohan’s proposed Bill is the legal underpinning of a moratorium period monitored by a Receiver to allow the parties to explore a sustainable resolution of any financial difficulties.

During the moratorium, the Receiver will not be permitted to negotiate the sale of the security or place it on the market, and farming will continue as usual.

After the moratorium, a Farm Debt Settlement Arrangement will be subject to court approval, and the PIA Section 115A veto over-ride will be open to the court, which would allow the borrower to hold onto the farm after an appropriate discharge of structured debt.

The Bill also seeks to protect the family farmhouse in repossession cases.

Since the Personal Insolvency Act 2012 was signed, every effort must be made to arrange the affairs of the debtor so that he and his family can continue to reside in the homeplace.

Mr Honohan says the provisions in his Bill are a logical extension of that principle to cases of farm indebtedness.

The farmhouse should be considered as separate from the farmlands, and subject to different procedures, even though both ‘parcels’ are not distinguished to this extent in the loan and mortgage documentation.

The Bill also offers protection to ‘inactive co-borrowers’. This, Mr Honohan says, is the classic ‘kitchen table’ picture, where the co-owner can be casually involved as a co-borrower, although not a farmer.

“Say the husband says to the wife, ‘oh the solicitor gave me these papers, you have to sign them’, and she says, ‘what’s it about?’.

“He says, ‘oh it’s something to do with the bank’, so she signs, but she’s actually a co-owner and she could be treated as a borrower for repayment purposes, guarantee and all that kind of stuff.”

The Bill, Mr Honohan says, provides an approach to credit and impaired credit which is ‘sui generis,’ or ‘of its kind’ and unique to the farm enterprise.

“It is an invitation to all stakeholders to engage in a searching reappraisal of the current dysfunction in the banking model as it applies to Irish agriculture,” he says.

‘It is all about protecting the small man or woman against predatory financial institutions’

The Impaired Farm Credit Bill, which is sponsored by the six rural Independent TDs, also has provisions which would give the State first refusal on farmland with no option but foreclosure.

Recently retired Master of the High Court Edmund Honohan says there might be occasions when farmland is threatened with foreclosure, and with no prospect of Farm Debt Settlement Arrangement, for whatever reason.

He says in these circumstances, the land should be optioned to the State, to be returned to full State ownership.

“Why shouldn’t the States have the option of first refusal if the land has to be sold by the creditor?” he says.

“The State should have the option of first refusal as sovereign, and they should say, ‘well, actually, we don’t want this land to be sold to a Dutch pension fund. Coillte would like this, for more afforestation or that this land needs to be protected for biodiversity’.”

The bill also provides for “proactive measures to secure the future”, recognising that the farming sector will need more credit.

However, Mr Honohan says the current banking system will not be enough. He says the State, and particularly the Central Bank, has the opportunity itself to create cross-border access to liquidity pools.

Introducing the bill in the Dáil last week, Independent Tipperary TD Mattie McGrath said it would create a policy platform to tip the scales back in favour of landowners and farmers.

“It is all about protecting the small man or woman against predatory financial institutions,” he said.

“There are many such families. We all have them in our constituencies. We have all had occasions where we have tried to help and found the tide too strong in favour of the institutions, whether they were banks, vulture funds or whatever.

“Much legislation has been introduced, including the hearsay legislation, that has opened the floodgates for the vulture fund carry-on.

“Without substantial local agriculture in local ownership, such as family farms, our towns will be blighted and rural Ireland will continue to decline.”