Farm Debt Mediation A Useful Backstop - Federated Farmers
The Farm Debt Mediation laws that take effect today [July 1] govern a scheme that farmers would hope never to have to use, but it’s a very useful backstop if a farm’s finances do go pear-shaped.
"We strongly supported this legislation as it was shaped and debated by the select committee and Parliamentary processes over the last year or so and we’re glad it’s now in place," Federated Farmers President and commerce spokesperson Andrew Hoggard says.
The Farm Debt Mediation Scheme requires creditors to offer mediation to farmers who default on payments before any enforcement actions kick in.
The Federated Farmers May 2020 Banking Survey showed more than 80 percent of farms carry a mortgage and overdraft, and while 69% percent of the 1400 farmers who responded were ‘satisfied’ or ‘very satisfied’ with their banks, 19 percent felt ‘under pressure’ from their banks, rising to 28 percent among arable farmers.
"It’s an uneven playing field in terms of available resources when a farmer and bank are in dispute. This legislation provides a platform for mediated communication," Andrew says.
"Although we hope it won’t have to be used very often, it will have done its job if it helps banks and farmers find enduring and sustainable solutions before it is too late."