What is Farm Debt Mediation?

Farm Debt Mediation provides obligations for creditors and rights for farmers under the Farm Debt Mediation Act 2018 (the Act).

There are two types of mediation available under the Act:

  • Farmer initiated mediation - where a farmer takes the initiative to request mediation with their creditor, whether the farmer is in default or not.
  • Creditor initiated mediation - where a creditor who wishes to enforce a farm mortgage in default, must issue a notice as required by section 8 of the Farm Debt Mediation Act 2018, advising the farmer that the farmer is entitled to request mediation within 21 days.

Mediation is provided through the Office of the South Australian Small Business Commissioner.

The Small Business Commissioner has determined that the fee payable by each of the parties participating in mediation of a farm debt dispute under this Act may be $195.00 per party, per mediation day (or part of a mediation day), provided that the Commissioner may, at their entire discretion, partly or wholly waive the fee for any or all parties to the mediation.

The Act applies only to:

  • farm mortgages covering a farm (or part of a farm), farm machinery or water or irrigation rights; and
  • farmers defined as: 'a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation'. This includes people who own land cultivated under a share-farming agreement, or the personal representatives of a deceased farmer.

Guarantors to a farm mortgage need to be fully informed and involved in the process.