A debt mediation scheme that will help farmers in financial distress deal with their lenders starts today.

The Farm Debt Mediation Scheme will require creditors to offer mediation to farmers who default on payments before they take any enforcement action, Agriculture Minister Damien O'Connor said.

"Total farm debt in NZ is $62.8 billion – up 270 per cent on 20 years ago. Farmers are especially vulnerable to business down-turns as a result of conditions that are often outside their control, like weather, market price volatility and diseases like Mycoplasma bovis and Covid-19".

O'Connor said the failure of a farm business could lead to the farmer and their family losing both their business and their home.


"For many rural communities the failure of one farm can have a ripple effect through those communities and the regional economy".

Farmers who operate a family business often don't have the resources to negotiate their own protections when dealing with lenders, said O'Connor.

"That's where this scheme fits in – it supports the mental, emotional and financial wellbeing of farmers and farming families who find themselves in financial trouble.

"The scheme is about early intervention – where either the farmer or the bank have an ability to go and seek mediation, which is a far better option than forced foreclosure," O'Connor said.

Two Approved Mediation Organisations, The Arbitrators and Mediators Institute of New Zealand (AMINZ) and Resolution Institute (RI) have been appointed to deliver the scheme.

Anyone wishing to access the scheme should visit the MPI website.