The Queensland agricultural industry is experiencing challenging conditions, not least being that approximately 75% of Queensland is drought declared. In those circumstances it is important that farmers and graziers actively manage their financial obligations, including understanding their rights and the corresponding duties of financial institutions. An option farmers ought to be aware of is the Queensland Farm Finance Strategy, and the Queensland Farm Debt Mediation Scheme it incorporates.

The Queensland Farm Finance Strategy is a voluntary scheme between rural industry organisations and (currently) ten (10) financial institutions. Under the Strategy, financiers commit to negotiating with farmers and their advisers to resolve financial problems, for example where commodity prices have fallen or drought conditions are such that there is insufficient income to meet liabilities.

The Queensland Farm Debt Mediation Scheme is an addendum to the Strategy. As a signatory to the Scheme, financiers undertake to offer farmers mediation prior to commencing any enforcement action in respect of a farm debt, including the exercising of a power of sale, commencing court proceedings for the recovery of the debt or the appointment of a receiver or administrator. A mediation is a confidential process and involves an independent third party (a mediator) assisting the farmer and the financial institution to agree on present and future financial arrangements.

The processes and procedures under the Queensland Farm Finance Strategy are only available to those solely or principally engaged in a farming operation, consistent with its purpose of encouraging the financial success of the Queensland agricultural industry. The relevant debt must also be between $50,000.00 and $10,000,000.00, secured by a mortgage and incurred for the purpose of funding the farming operation.

The Queensland Farm Finance Strategy offers a level of protection to farmers experiencing financial problems, but it is by no means a “get out of jail free” card. In participating in the Strategy, farmers have obligations to meet their financial commitments during negotiations, seek independent advice (including legal advice) and comply with the strict timeframes set out in the Strategy.

Access to professional advice, including legal advice, underpins the operation of the Queensland Farm Finance Strategy and I encourage farmers experiencing financial problems to seek assistance as soon as possible.

Jane Young is a Senior Associate and head of the Rural Law Team at Kelly Legal and can be contacted on jane.young@kellylegal.com.au

You can find Jane Young’s column in the Rural Weekly newspaper each week.