News

11 February 2020

Federated Farmers SC welcomes next steps in farm debt mediation scheme

Federated Farmers SC welcomes next steps in farm debt mediation scheme

Samesh Mohanlall14:10, Feb 10 2020

Federated Farmers South Canterbury branch president Jason Grant says there are only advantages to the Farm Debt Mediation Scheme to be implemented on July 1. (File pic)

Help is at hand for South Canterbury farmers feeling financial pressure.

Ministry for Primary Industries (MPI) is taking steps to establish the new Farm Debt Mediation Scheme which aims to help provide a way forward when a farm business comes under financial stress after it begins operating on July 1, 2020.

According to MPI, the Farm Debt Mediation Act, which became law on December 13, 2019, brings a new approach to farm debt mediation.

Federated Farmers South Canterbury president Jason Grant welcomed the scheme.

"There are only advantages in my view. Under financial pressure it can be difficult for some people to make the right decisions.

"Having a mediator to help make these important calls is a good thing."

The new scheme is designed to address any power imbalance between stressed farm businesses and their creditors. Creditors will be required to offer mediation to farmers before they can take action on a debt default.

"Having a neutral mediator to help farmers under financial stress negotiate through tough financial decisions with their lender.

"This will reduce the stress for farmers in this position and help get practical solutions that will benefit both parties."

MPI's deputy director-general of agriculture and investment services, Karen Adair, said the ministry began to consider applications from mediation organisations wanting to take part in this scheme from February 1.

"We've already heard from leading mediation organisations that are interested in participating. If an organisation is approved, they will then make sure their mediators are trained for the new scheme."

Adair said the Farm Debt Mediation Scheme will help provide a way forward when a farm business comes under financial stress.

"It will ensure a fair mediation process takes place with an independent, neutral mediator and all the key people around the table," she said.

"This provides the best chance that everyone involved can reach agreement on a good way forward. This may be a way to turn things around or, in some cases, to wind down the business.

Adair said two organisations - the Arbitrators' and Mediators' Institute of New Zealand and the Resolution Institute - have advised MPI they are intending to apply to be approved mediation organisations under the new legislation.

"They are jointly developing a day-long seminar in mid-February to train existing mediators."

The Timaru Herald