Farm Debt Mediation Tasmania

The Tasmanian Farm Debt Mediation (FDM) scheme is designed to help farmers who are struggling with their finances to resolve issues with creditors without going to court.

The scheme provides for a structured negotiation process in which a neutral and independent mediator helps farmers and creditors to communicate effectively, to resolve matters relating to farm debts, and to formalise that resolution in an agreement.

This process is cheaper and quicker than going to court, and is a way for farmers and creditors to work together to find a solution with the help of a neutral mediator.

Tasmania’s Farm Debt Mediation Act 2024 is available online.

How it works:

The basic process involved in FDM is as follows:

Creditors may invite a farmer to mediate if a farmer’s loans are in default, and they must not take enforcement action in respect to a farm mortgage unless an exemption certificate is in place.
Farmers can initiate mediation at any time. Loans do not need to be in default in order to access mediation. If a creditor does not agree to mediation, the farmer can apply for a certificate which prevents the creditor from taking enforcement action for a set period (6 months).
If an invitation to mediate is accepted, the mediation is organised and undertaken in accordance with the prescribed procedures.
After the mediation has taken place, the mediator will provide a document stating the main points of agreement.
If agreement cannot be reached, and the mediation has been undertaken satisfactorily, the creditor can apply for a certificate which will permit enforcement action against the farm mortgage.

Tasmanian FDM legislation will apply to farmers engaging in farming operations that primarily involve agriculture (for example, crop growing and livestock or grain farming); aquaculture; and/or the cultivation or harvesting of timber or native vegetation.

The scheme will not apply to businesses that primarily involve wild harvest fishing or the hunting or trapping of animals in the wild.

The scheme will also not apply to “lifestyle” or hobby farming operations.

Farm machinery that is used for the purposes of a farming operation such as vehicles, machines or other implements and is secured under a farm mortgage is also covered under the Act.

There will be no obligation on either party to participate in mediation. If the farmer declines to mediate, the creditor will be able to proceed with enforcement action in line with the terms and conditions of the loan agreement. If the creditor declines to mediate, a prohibition certificate may be issued, which will prevent the creditor from taking any enforcement action related to that debt for six months.

Contact us

Questions about the scheme can be directed to Building Tasmania by emailing FDMTasmania@building.tas.gov.au

Farm Debt Mediation Tasmania

How it works:

What types of businesses and property are eligible for Farm Debt Mediation

Will it be compulsory for farmers or lenders to participte in mediation?

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