New Farm Debt Mediation laws 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, Federated Farmers says.
"We strongly supported this legislation as it was shaped and debated by the selectcommittee and Parliamentary processes over the last year or so and we're glad it's now in place," said Federated Farmers president and commerce spokesman Andrew Hoggard.
The Farm Debt Mediation Scheme requires creditors to offer mediation to farmers who default on payments before any enforcement actions kick in.
Federated Farmers president Andrew Hoggard. Photo / Supplied
The Federated Farmers May 2020 Banking Survey showed more than 80 per cent of farms carry a mortgage and overdraft, and while 69 per cent of the 1400 farmers who responded were "satisfied" or "very satisfied" with their banks, 19 per cent felt "under pressure" from their banks, rising to 28 per cent 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," said Hoggard.
"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".
