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Farm Debt Mediation Scheme operation outlined

30 January 2020

The new Farm Debt Mediation Scheme will begin operating on 1 July 2020 and the Ministry of Primary Industries says it will be able to consider applications from next week (2 February onwards) from mediation organisations wanting to participate in the scheme.

Parts 1 and Subparts 1 and 2 of Part 3 of the Farm Debt Mediation Act 2019 come into force on 1 February, with the rest of the Act coming into force on 1 July.

Subparts 1 and 2 of Part 3 relate to approval of mediators and administrative review of decisions.

MPI says the Farm Debt Mediation Scheme brings a new approach to farm debt mediation.

It says the scheme is designed to address any power imbalance between stressed farm businesses and their creditors. Creditors will be required to offer mediation to farmers before they can take action on a debt default.

"We've already heard from leading mediation organisations that are interested in participating. If an organisation is approved, they will then make sure their mediators are trained for the new scheme," says Karen Adair, MPI's deputy director-general of Agriculture and Investment Services.

"There are 2 key dates for us – the first is being ready to approve mediation organisations to take part in the Farm Debt Mediation Scheme from 1 February, and the other is being open for business for farmers and creditors on 1 July.

"We don't want to completely re-invent the wheel for farm debt mediation, and the processes we are designing will be familiar for current mediators. We will require mediators to have farm business and rural sector knowledge, and we want good regional coverage."

Ms Adair says two organisations, the Arbitrators' and Mediators' Institute of New Zealand and the Resolution Institute, have advised MPI they are intending to apply to be approved mediation organisations under the new legislation. They are jointly developing a day-long seminar in mid-February to train existing mediators.

She says one feature of the Farm Debt Mediation Scheme will be that, if a farmer prefers, mediation can be based on tikanga Māori (protocols).

"This could help get better engagement and outcomes. This is timely, too: the need to provide for mediation according to tikanga was highlighted by the Family Justice Review report in May 2019. We are working with mediators who are experienced and knowledgeable in tikanga to set this up."

Last updated on the 30th January 2020