Changes to the Farm Debt Mediation Act 2011
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A number of significant changes were made to the Farm Debt Mediation Act 2011 (the Act) in 2022 to strengthen farmers’ rights to farm debt mediation, streamline the process and align aspects of the legislation with other states.
Changes to farm debt mediation
From 31 October 2022 the following changes took effect:
- The Victorian Small Business Commission (VSBC) took on full administrative responsibilities for the Farm Debt Mediation Scheme from Agriculture Victoria, which means that:
- creditors now notify the VSBC directly of an agreement to mediate (for both creditor and farmer-initiated mediation)
- forms for mediation, information, guidance on processes and supporting resources are now accessible via the VSBC’s website
- the VSBC is now the first point of contact for any queries about farm debt mediation.
- The definition of ‘farming operation’ now includes aquaculture and forestry and timber production, ensuring a wider range of farms are covered.
- A creditor is now required to obtain an exemption certificate in all instances before taking enforcement action (recovering debt on a farm mortgage), including when a farmer has not responded to their creditor’s offer of mediation. N.B. this has removed the ability of a creditor to take action without an exemption certificate if the farmer does not respond to their offer to mediate within 21 days.
- The VSBC now has some discretion in the issuing of exemption certificates and prohibition certificates (which stop creditors from taking enforcement action). This may include the VSBC refusing to issue an exemption certificate where we are satisfied that the farmer is justified in refusing or failing to mediate and intends to do so within a reasonable timeframe.
- If a farmer asks their creditor to mediate when they are not in default and mediation takes place, an exemption certificate cannot be issued (encouraging farmers to initiate mediation earlier), and the farmer will keep their right to be offered mediation if they are later in default. N.B. the creditor is only obliged to mediate if the farmer is in default.
- If a creditor has been issued with a three-year exemption certificate but does not start enforcement action before the certificate expires, they must provide the farmer with notice of the availability of mediation again, and obtain a new exemption certificate before they can take enforcement action.
The VSBC continues to provide early help, which includes arranging mediations for farm debt.
For more information:
- see our farm debt mediation process, forms and FAQs
- access support and information for farmers and information for creditors
- contact us.