Lynda Gray

The first official steps in implementing the Farm Mediation Act were taken on February 1 with the Ministry for Primary Industries calling for potential mediation organisations to authorise farm debt mediators.

The approved mediators will be a key player in the process prescribed in the Act aimed at helping debt-burdened farmers.

An increasing number of farmers are struggling with debt judging by Reserve Bank figures which report an almost three-fold increase over the last 20 year to almost $63 million last year.

Under the scheme, formalised in the Farm Debt Mediation Act 2019 in December last year, it will be mandatory for secured creditors to take part in mediation before taking any debt enforcement action against farmers.

Both parties will have up to 60 working days to complete the mediation process unless both agree to extend this.

The goal is to produce a binding agreement and action plan for management of the debt. If the process fails to come up with a plan, the parties can apply to get a determination on whether enforcement action can proceed or not.

The cost of mediation is estimated at about $6000 to be shared between parties, with the farmer’s maximum contribution $2000.

The MPI administered scheme will cover debts owned by any business involved in primary production, including loans secured against farmland, farm machinery and livestock, harvested crops and wool.

More information on the Farm Mediation Act, expected to be fully up and running by July 1, is available at