Debt mediation call

Jo FulwoodThe West Australian

Farming groups and politicians have called for the introduction of compulsory debt mediation to reduce the trauma involved in farm foreclosures.

This comes in the wake of a confrontation between Cuballing farmer Bruce Dixon and his bank's administrators, who attempted to foreclose on his property on Friday, March 13.

Rural Action Movement president Greg Kenney said seven armed police were called to Mr Dixon's property on what he described as a Black Friday for the two receiver managers involved on the day.

But he said the issue for the Dixons was still "far from over" and he called for an investigation into the conduct of the ANZ Bank.

Get in front of tomorrow's news for FREE

Journalism for the curious Australian across politics, business, culture and opinion.


It has been reported receivers RSM Bird Cameron, appointed by the bank, lacked the required court documents or legal warrants to take possession of Mr Dixon's farm.

However, in a statement to _Countryman _, a spokeswoman for RSM Bird Cameron said no court order or warrant was required for its representatives to visit the property.

"We understand the bank has been working with Mr Dixon over the past four years to remedy his financial difficulties," the spokeswoman said.

She said RSM Bird Cameron had a telephone discussion with Mr Dixon at 9.16am on March 13, and was invited to the property to meet with him at 11am the same day.

According to an ANZ spokesman, the bank had been working closely with the Dixons since 2011 and during this time had provided them with ongoing support.

"We have also actively tried to engage with the customer on a number of occasions through mediation, where a mutually agreed outcome had been reached in 2014 via the Financial Ombudsman Service," she said.

"Taking possession of a farm is always the last option after all other avenues, including mediation, have been exhausted and we work with customers over several years to try to resolve their financial situation."

But Mr Kenney said farmers must know their rights before running to solicitors.

"What happened at Bruce Dixon's farm is a product of farmers not knowing their basic tenure rights," he said.

"Until a court order says otherwise, every farmer is in control and possession of his farm, not the bank, even when the farmer defaults.

"It's a very lengthy and difficult process to evict a farmer if he doesn't want to go."

Mr Kenney said in every case there were always two sides to the story.

"Some of the practices that the banks get involved with make it difficult for a farmer to run their business and it often precipitates a default.

"One example of this is the late approval of a budget, in May or June, and that's not uncommon when a farmer is in trouble, and that impacts their ability to farm properly."

WAFarmers president Dale Park met late last week with the office of Federal Minister for Agriculture Barnaby Joyce to discuss compulsory debt mediation through the Rural Financial Counselling Service, which is primarily federally funded.

"We know the State Government is already looking at this, and we've had discussions with them on this," he said.

"But from a federal perspective, I see the Rural Financial Counselling Service as a necessary tool in readjustment, and readjustment happens whether you like it or not.

"The best and most rewarding readjustment is when you make a decision yourself, and if you get there early enough the outcome doesn't have to be that you sell up the farm.

"One of the good things about the Rural Financial Counselling Service is that they give an objective perspective to where the farm is at.

"They have no financial investment in the business. They take a holistic view of the farming family and their objectives as a family."

Compulsory debt mediation already occurs in other States.

In Victoria, the Farm Debt Mediation Scheme makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings on farm mortgages.

But Mr Park said he believed compulsory mediation must occur earlier in the process.

"It needs to occur as soon as farmers go into asset management," he said.

"By the time you have a letter of demand on the table, it's all over."

Eyre MLA Graham Jacobs, who has been outspoken on the issue of farm foreclosures, has supported the call for compulsory mediation, saying the farm debt crisis in WA was potentially bigger than most people realised.

He estimated that up to 300 farm businesses might not be in a position to fund this year's cropping program.

"There needs to be some requirement of the banks, be that legislation or regulations, from a State jurisdiction, that things must go into a 21-day negotiation period, to try to get some resolution to work through this, and this currently doesn't happen in our State," he said.

"The issue of compulsory mediation has been hanging around for a while and I've been saying for a long time that we need to look at this."

Mr Jacobs has also been vocal in his criticism of the criteria attached to the Federal Government's Farm Concessional Loan Schemes, which are administered by the State Government.

He said the criteria for a farm business to seek approval from its bank before applying for the loan must be removed.

"A number of famers have told me their banks are not supporting their concessional loan applications," he said.

"The only way for these farmers to work themselves out of debt is to allow them to put in their full cropping program."

Mr Jacobs reiterated his call for a parliamentary inquiry into the ethics and behaviour of banks in terms of agricultural lending.

An ANZ spokesman said the bank was supportive of a national approach to farm debt mediation, rather than just in the States of Victoria, NSW and Queensland, and had recently presented information to the Australian Bankers' Association to support this.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails