Palaszczuk Government acts to ensure mediation over farm debt disputes

Published Tuesday, 30 August, 2016 at 10:05 AM

Minister for Agriculture and Fisheries
The Honourable Leanne Donaldson

The Palaszczuk Government today introduced legislation to help ensure financial disputes between farmers and banks can be resolved with the assistance of mediators.

 Agriculture Minister Leanne Donaldson introduced the Farm Debt Mediation Bill 2016 as an essential part of measures to reduce financial stress in rural Queensland.

 “In response to issues identified by the Rural Debt Banking Roundtable, and the findings of the Rural Debt and Drought Taskforce, the government announced a $36 million assistance package to assist farmers whose incomes and profitability have been eroded by drought,” the Minister said.

“This Bill delivers on key aspects of the Rural Assistance Package, legislating a farm business debt mediation process for the efficient and equitable resolution of disputes between farmers and financial institutions

“The forced sale of farm assets is always difficult, but there are times when farming families believe they have been unfairly treated when required by lenders to repay loans.”

Minister Donaldson said the Bill would establish a process for banks and farmers to resolve financial disputes through an official mediator and structured negotiation.

“Mediation is a confidential process that is quick, accessible and affordable.

“It is an alternative to expensive and drawn-out legal processes and it does not stop farmers taking legal action to resolve disputes where such action is warranted,” the Minister said.

“The Bill will apply to all providers of rural credit in respect of farm mortgages.

“Removing the need for expensive and potentially lengthy legal processes to resolve issues relating to farm debt will be a huge benefit to farmers.

“The Bill would not stop financial institutions and producers from using informal negotiations to resolve problems.

“But if informal talks fail the mortgagee will have to offer mediation to the farmer before starting enforcement action," the Minister said.

The Bill would also establish the Queensland Rural and Industry Development Authority (QRIDA) to replace QRAA.

The new Authority will administer enhanced schemes of assistance to farmers.

"QRIDA will also carry out research into the financial performance and sustainability of the rural and regional sector in Queensland, and have the responsibility of administering the farm debt mediation program," Minister Donaldson said.

"As foreshadowed in the Rural Assistance Package announcement, some of the measures affecting QRAA loan schemes will require changes to the Rural and Regional Adjustment Regulation 2011 which will be made in the near future.

 “This legislation is an important step and I hope it will attract bipartisan support.”

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