The Farm Debt Mediation Scheme is the process whereby a creditor is required to enter into a process of mediation with the borrower prior to commencing debt recovery proceedings on farm mortgages.

Typically as a farmer you have 21 days to respond to this mediation offer or the creditor may choose to commence proceedings regardless.

It is suggested that "farm debt" has risen substantially over recent years and this figure is likely not to include the unsecured debt owed to farm suppliers and the like.

Given this situation secured creditors may be predisposed to exercise their right to commence action to recover their debt.

The Agriculture Victoria website states that "...Farm debt mediation is a structured negotiation process where a neutral and independent mediator assists the farmer and the creditor to try to reach agreement about current and future debt arrangements. The mediator's role is to facilitate the discussion and they will not provide advice on the matters in dispute. Mediation is a simple, voluntary and confidential process that is quick, accessible and affordable...."

For further information visit http://agriculture.vic.gov.au/agriculture/farm-management/business-management/farm-debt-mediation or call 1300 834 775 to book an appointment with one of our Rural Financial Counsellors.