Farmer-initiated mediation process and forms
On this page
- The farmer requests farmer-initiated mediation for their farm debt (form 7)
- The creditor agrees to enter into farmer-initiated mediation or refuses the request (form 8)
- The creditor notifies the Victorian Small Business Commission that farmer-initiated mediation is required for a farm mortgage (form 9)
- The farmer requests a prohibition certificate (form 10)
- More information
Under the Farm Debt Mediation Act 2011 (the Act), a farmer can request mediation with their creditor for their farm debt. The farmer does not have to be in default to make this request.
If the farmer asks their creditor to mediate when they are in default and the creditor refuses mediation or does not respond within 21 days, the farmer can request a prohibition certificate from the Victorian Small Business Commission (VSBC). This certificate stops the creditor from taking enforcement action for up to six months or until the day the farmer and creditor enter into mediation.
If a farmer asks their creditor to mediate when they are not in default and mediation takes place, an exemption certificate cannot be issued, and the farmer will keep their right to be offered mediation if they are later in default.
This is the process and forms used for farm debt mediation where the farmer initiates the process:
The farmer requests farmer-initiated mediation for their farm debt (form 7)
The farmer notifies the creditor in writing that they are requesting mediation for their farm debt, using form 7:
Form 7 advises the creditor that:
- the farmer requests farmer-initiated mediation for their farm debt
- they have 21 days from the date the notice was given to accept or refuse the request to mediate.
Along with form 7, the farmer also includes a copy of form 8 (linked to below) to allow the creditor to accept or refuse the request for mediation.
The creditor agrees to enter into farmer-initiated mediation or refuses the request (form 8)
The creditor may accept or refuse an offer to mediate by responding to the farmer in writing, and must do so using form 8:
If the creditor refuses mediation or does not respond within 21 days and the farmer is not in default, there is no further action. The VSBC encourages farmers in this position to contact their local Rural Financial Counselling Service (RFCS). Rural financial counsellors can help farmers who are experiencing difficulty to understand their financial position and the viability of their enterprise, and develop and implement plans to improve their situation.
If the creditor refuses mediation or does not respond within 21 days and the farmer is in default, the farmer can request a prohibition certificate from the VSBC. This certificate prevents the creditor from taking enforcement action for up to six months or until the day the farmer and creditor enter into mediation.
The creditor notifies the Victorian Small Business Commission that farmer-initiated mediation is required for a farm mortgage (form 9)
If the creditor agrees to the farmer’s request for mediation, the creditor notifies the VSBC of this agreement and advises that farmer-initiated mediation is required.
The creditor sends form 9 to the VSBC with copies of forms 7 and 8:
Complete form 9 via our help portal (if you would like this form in an accessible Word version, contact us): Notice that farmer-initiated mediation is required
Once notified, the VSBC contacts the farmer and creditor to provide early help, which includes giving both parties guidance on their rights and obligations, giving farmers information on available supports, appointing a mediator and arranging a mediation session.
At mediation, the farmer and creditor come together with an impartial and experienced mediator to discuss options for managing current and future farm debt arrangements. At the end of mediation, the farmer and creditor can agree to sign a binding agreement to resolve the dispute. The creditor must ensure that any binding agreement between the parties is reflected in any contract, deed, mortgage or other instrument.
The farmer requests a prohibition certificate (form 10)
If the farmer is in default under their farm mortgage and the creditor has refused their request to mediate or has failed to respond within 21 days of the farmer making the request, the farmer can request a prohibition certificate from the VSBC under section 13 of the Act, using form 10:
Complete form 10 via our help portal (if you would like this form in an accessible Word version, contact us): Farmer request for prohibition certificate
If the VSBC considers that all requirements have been met, we may issue a prohibition certificate, preventing the creditor from taking recovery action for six months or until the day the farmer and creditor enter into mediation. The VSBC has some discretion in the issuing of these certificates.
More information
For more information:
- see our farm debt mediation forms, FAQs and information on important changes to the Farm Debt Mediation Act 2011
- access support and information for farmers
- contact us.