DISPUTES that arise between farmers and their banks need to be resolved cooperatively and equitably, preferably without the need for farm debt mediation.
AgForce president Grant Maudsley said while farmers were not opposed to a mandatory approach to mediation, clear benefits over the current voluntary process needed to be demonstrated.
Mr Maudsley’s comments follow the Palaszczuk government’s announcement today (click here for the story) that new laws would force banks to engage in a formal mediation process with debt-stressed Queensland farmers before starting any enforcement actions.
"AgForce is a signatory to the Queensland Farm Finance Strategy, which includes a voluntary negotiated debt mediation framework and emphasises the early recognition and resolution of financial issues,” Mr Maudsley said.
"Our key interest is in ensuring the best possible outcome for primary producers faced with farm debt problems, and we are not opposed to a mandatory approach to mediation when it can be shown to provide clear benefits over the current voluntary process.
"This includes ensuring producers' mediation costs are not significantly increased and that they are provided with access to professional advice and representation, as well as comprehensive information on their position, to effectively advance their interests with their creditors.
"Access to affordable financing is vital for the development of agriculture in Queensland, and any mandated farm debt mediation should not detract from the capacity for borrowers and creditors to resolve issues informally.”
Agriculture minister Leanne Donaldson said the Farm Debt Mediation Bill 2016 would help ensure financial disputes between farmers and banks could be resolved with the assistance of mediators.
The Farm Debt Mediation Bill 2016 also proposes changes to QRAA including enhancement of assistance schemes for producers and research into the financial performance of the rural sector.
Mr Maudsley said mediation was just one element in addressing rural debt challenges. Other initiatives AgForce had called for and should be further supported include:
- Assistance towards professional business assessment towards recovery planning or a dignified exit strategy if necessary.
- Access to affordable financing options for restocking and drought recovery.
- A collaborative review with rural lenders to improve products and practices for agriculture.
- Improved climate risk management strategies including insurance market development.
Opposition agriculture spokesman Dale Last said many grazing and farming families in Queensland remained under enormous pressure because of the long running drought.
“Despite recent welcome rains, cash-flow is simply not available,” Mr Last said.