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Farm Debt Mediation Bill a welcome relief


DairyNZ chief executive Dr Tim Mackle is welcoming yesterday’s announcement of the Farm Debt Mediation Bill as an example of an initiative that will mean a lot to farmers who may be feeling financial pressure.

If passed into law, the Bill will require secured creditors who lend money to farmers to offer mediation to farmers if they default on payments, before taking enforcement action.

The legislation will apply to loans that are secured against farmland, farm machinery, livestock and harvested crops and wool.

“For many, the farm is more than just a business. It’s a home, a lifestyle or an asset to be passed down to the next generation. That brings with it its own unique pressures,” said Dr Mackle.

“This Bill acknowledges that and will provide support for farmers in financial distress in their dealings with secured creditors, allowing for the fair, equitable and timely resolution of farm debt issues.

“Sometimes a farmer’s business can also be thrown off- kilter by an event entirely out of their control whether that be a drought, a flood, volatile international markets or a biosecurity incursion. This legislation will really help support farmers managing such volatility,” said Dr Mackle.

“While we would hope that farmers don’t find themselves in this unfortunate situation, this is the reality of any business sector.”

The DairyNZ Economic Survey 2017-18 results show farm working expenses have increased for dairy farmers – with a 70 cent rise in the break-even costs that year to $5.87 per kg milksolids. The current break-even for dairy farmers is $5.95 per kg milksolids.



“Our DairyNZ 2017-18 Economic Survey data also indicated that 3-4 percent of farms are struggling to meet their payments or have very high LVRs (Loan to Value Ratios). Those are the farms which will really see the benefit of this Bill.”

DairyNZ encourages farmers to engage with the Select Committee process to ensure a robust piece of legislation that will have a positive impact on the rural sector and farming families.


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