The Queensland Farmers’ Federation (QFF) has welcomed the Australian Government’s commitment to establish a National Farm Debt Mediation Scheme following recommendations made by the Banking Royal Commission released yesterday.
The government has also agreed to recommendations made by Royal Commissioner Justice Kenneth Hayne to have ‘specialised’ agricultural bankers manage distressed farm loans, prevent banks charging default interest during drought or natural disasters and only appoint receivers as a remedy of last resort.
QFF President Stuart Armitage said the government’s commitment to act on the recommendations made by the Royal Commission was a positive step in improving financial services for Queensland farmers.
“Following continued advocacy by QFF, the Queensland Government legislated to create a state Farm Debt Mediation Scheme, recognising the unequal playing field for farmers when negotiating with the big banks,” Mr Armitage said.
“Prior to this, QFF facilitated a voluntary debt mediation system – the Queensland Farm Finance Strategy – on a pro bono basis for 20 years. Legislating and properly resourcing a state arrangement was the logical step towards nationally consistent farm debt monitoring and mediation processes.”
“Bankers move around and modern farming businesses operate across state borders, so a nationally consistent approach to this issue that takes the best elements from each jurisdiction is likely to see a greater chance of fair and equitable outcomes being reached.”
“The requirement that banks not charge default interest on agricultural loans where a national disaster has been declared is timely as many farmers are dealing with drought across 58 per cent of the state and flooding rains in the north.”
In addition, the Australian Financial Complaints Authority (ACFA) will now allow aggrieved farmers seek redress from the banks for incidents stretching back to 1 January 2008. Normally the right to seek redress would end after six years.
“Farmers have 12 months to lodge complaints seeking justice for incidents which occurred between 2008 and 2012. The maximum compensation farmers are able to be seek through ACFA is $2 million,” Mr Armitage said.