News

Calling for holistic approach

By Country News

The royal commission into banks has called for an end to the current state-by-state mediation schemes to implement a nationwide approach to farmers in distress.

The calls for a holistic national approach to debt mediation come off the back of a December report by the Select Committee on Lending to Primary Production Customers, which handed down a total of 11 recommendations to improve how financial institutions lend to farmers.

Echuca mediation consultant Andrew McLaughlin made a submission to the select committee and said in the past 25 years he had personally negotiated and mediated 400 cases and had also provided assistance with more than 4500.

‘‘There is no justified reason for a bank to foreclose or appoint receivers, or bankrupt farmers when their asset value is greater than the debts to the bank,’’ he said in a submission.

‘‘I have experienced and seen the impact of the recovery practices used by certain senior managers of a number of banks which have not only in some cases physically removed farmers from their homes, but also abused, threatened, intimidated and divided families.

‘‘I am appalled and sickened that after 25 years of assisting farmers to protect their farms and rights that so many that I was not involved with had lost everything and in a lot of cases lost their lives through suicide.’’

The committee also received 38 confidential submissions, largely from farmers who did not want their circumstances to be disclosed publicly.

Accounting firm BDO said it supported the adoption of a nationwide, legislated approach to farm debt mediation with partner Peter Winterflood throwing his weight behind the idea.

‘‘A cattle producer in Queensland doesn’t really care if the arrangements that apply to him (when facing severe financial stress) are different from those that apply to a wheat farmer in Victoria,’’ he said.

However, he said while national consistency was a ‘‘commendable’’ idea, it wouldn’t have much of an impact on individual borrowers.

‘‘What would really make a difference and benefit everyone involved in the farm debt mediation process would be to make the appointment of advocates mandatory,’’ he said.

‘‘Our view is that the royal commission should consider insisting that every borrower has an experienced and qualified advocate representing them throughout the mediation process.

‘‘This would be in addition to the appointed mediator, who in no way represents nor negotiates with the banks on the agribusiness borrower’s behalf. This would help ensure fair, reasonable, considered and achievable outcomes are produced.’’