Farmers to work with specialised agricultural bankers
THE Australian Government has committed to establishing a National Farm Debt Mediation Scheme.
This decision was welcomed by the Queensland Farmer's Federation after it was announced at the Banking Royal Commission on February 5.
The government also agreed to recommendations made by the Royal Commissioner Justice Kenneth Hayne to have specialised agricultural bankers manage distressed farm loans.
This will prevent banks from 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,” he said.
QFF said legislating and properly resourcing a state arrangement was a logical step towards nationally consistent farm debt monitoring and mediation processes.
"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,” Mr Armitage said.
"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.”
The Australian Financial Complaints Authority will now allow aggrieved farmers seek redress from the banks for incidents stretching back to January 1, 2008, instead of the regular redress period of six years.
"Farmers have 12 months to lodge complaint seeking justice for incidents which occurred between 2008 and 2012. The maximum compensation farmers are able to be sought through ACFA is $2 million,” Mr Armitage said.