Print this page
Thursday, 12 September 2019 10:55

Debt mediation Bill will help hard-pressed farmers — O’Connor

Written by  Jill Galloway
Agriculture minister Damien O’Connor believes the new bill will go along way helping farmers dealing with debt. Agriculture minister Damien O’Connor believes the new bill will go along way helping farmers dealing with debt.

The Farm Debt Mediation Bill will go far in helping farmers deal with farm debt, claims Agriculture Minister Damien O’Connor.

Farm debt has risen 270% during the past 20 years and is now at least $62 billion, says O’Connor.

The bill will create a new compulsory mediation scheme to support farmers in financial distress in dealings with their lenders.

“The Farm Debt Mediation Bill will require creditors to offer mediation to farmers who default on payments before they take any enforcement action,” he told Rural News.

O’Connor, who is also Minister of Rural Communities, says farmers have been doing it tough in recent years due to rising levels of farm debt and there is a hefty power imbalance between farmers and lenders.

“Farmers are especially vulnerable to business downturns as a result of conditions often outside their control, like weather, market price volatility, pests and diseases like Mycoplasma bovis.”

He says farmers who run a family businesses often don’t have the resources to negotiate their own protection when dealing with lenders. 

“That’s where this piece of legislation fits in.”

O’Connor says the Bill is pragmatic in being focussed on early intervention.

He points out that farms are often much more than a business.

“They are the centre point for a family and for a community. And the failure of a farm business can lead to the farmer and their family losing both their business and their home.” 

O’Connor claims the Bill will also help to acknowledge and support mental health problems which can be associated with farm debt issues. It will create opportunities to improve a business and farm practice before they hit a crisis point.

“This legislation will give us a system of mediation where a bank and a borrower come together and work out a way of moving forward or find a way for a farmer with an unviable business to exit with dignity. It’s a process that will ensure a fairer system of justice for those in financial distress.”

O’Connor says the scheme has broad support from lenders, including all major banks, the New Zealand Bankers Association and Federated Farmers.

He expects each case of mediation to cost about $6000 split between farmer and lender -- about $3000 each. The next step will be a second reading of the Bill in Parliament, with changes resulting from the parliamentary select committee process. A report to Parliament is due on the Bill on November 4.

“We are aiming for the Bill to pass into law before the end of the year, with [most of its content] coming into effect in February 2020,” O’Connor said.

» Connect with Rural News

More like this

High alert for stink bugs

Biosecurity Minister Damien O’Connor is warning travelling Kiwis to be vigilant as the high-season for the crop-eating brown marmorated stink bug (BMSB) is under way.

O’Connor off to trade talks

Agriculture Minister Damien O’Connor, heads to Thailand today to attend the final Regional Comprehensive Economic Partnership (RCEP) Ministerial meeting, as negotiations enter their final stages.

Angry pills?

A mate of the Hound attended the huge meeting in Timaru, last month, on the Government’s proposed freshwater reforms. Hundreds of anxious farmers turned up to hear officials – as well as Agriculture Minister Damien O’Connor and Environment Minister David Parker – discuss the topic.

$31k Californian junket for PSC members

Taxpayers forked out at least $31,000 sending Primary Sector Council (PSC) members to an agribusiness bootcamp at Stanford University in California, USA, in July.

» The RNG Weather Report

Featured

A big future ahead

Age hasn't been a barrier for young vegetable grower of the year Austin Singh Purewal.

 

Sheep and beef doing its bit

No increase in stock numbers in the sheep and beef sector is anticipated as the industry moves towards carbon neutrality, says Beef + Lamb NZ head of nutrition Fiona Windle.

Fonterra lifts milk price

Good news for Fonterra farmers – the co-op is increasing its 2019-20 forecast farmgate milk price by 30c/kgMS.

» Connect with Rural News

» Connect with Rural News