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
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."