Australia: Farm debt mediation around the nation: recent changes in Queensland

Last Updated: 2 May 2017
Article by Catherine Wheeler

The Farm Business Debt Mediation Bill 2016 (Qld) (FBDM Bill) was passed by the Queensland Parliament on 21 March 2017, with the legislation coming into effect on 1 July 2017. Partner Catherine Wheeler and Law Graduate Emma Scotney assess the implications for lenders and farmers in Queensland, and examine Western Australia's farm debt mediation regime in light of this new legislation.

The Australian Farm Debt landscape

More than 95 percent or farms in the broadacre sector are family owned and as such, debt is an important source of funds for working capital and investment.1 Nationally, average broadacre debt more than doubled from 2000-01 to 2015-16 - mainly due to an increase in the average size of Australian farms.2 Total rural debt increased to 69.5 billion as at September 2016.3 Bank lending accounted for approximately 95 percent of the total institutional lending.4 It is against this backdrop that the Queensland Parliament passed the FBDM Bill late last month.

Introduction of a new compulsory mediation process in Queensland

Prior to the passing of the FBDM Bill, Queensland operated under a voluntary farm debt mediation scheme implemented by the Queensland Farmer's Federation and the Australian Bankers Association.

While many large lenders readily participated in this voluntary scheme, not all rural credit providers took part in the mediation process. The new Bill does not prevent farmers resolving issues informally with credit providers. However, the credit provider is prevented from taking enforcement action against a farmer without first entering into a mediation process unless they are in possession of an exemption certificate.

"Farm business debt" under the FBDM Bill is defined as an amount owed by a farmer that—

  • was borrowed for the purpose of conducting a farming business; and
  • is secured by a farm mortgage.

Importantly, loans and finance secured by farm machinery, livestock and farm infrastructure are not affected by the introduction of the new Bill as the definition of "farm mortgage" under the Bill only encompasses security over farming land and water allocations.

Under the new regime, when a farmer is in default of a farm mortgage, the credit provider must initially serve the farmer an enforcement action notice and provide them with a copy of the mediation information package.

The notice must state that the farmer may ask for mediation of the debt within 15 days of receipt of the notice. Where a farmer has asked for mediation with the credit provider, there is an obligation upon the credit provider to enter into mediation with the farmer. If the credit provider fails to mediate, the farmer may then apply for an enforcement suspension certificate.

If a farmer applies for this certificate, the Queensland Rural and Industry Development Authority must provide the financier with a show cause notice that requires the credit provider to provide reasons for any delays or refusal to mediate. It is expected that this requirement will act as a strong incentive for credit providers to resolve debt default issues by way of mediation.

Other States

The passing of the FBDM Bill brings Queensland into line with other mandatory mediation regimes operating in Australia such as those under the Farm Debt Mediation Act 1994 in New South Wales and the Farm Debt Mediation Act 2011 in Victoria, respectively.

There is currently no mandatory farm debt mediation process for farmers in South Australia. Tasmanian farmers are in a similar position, albeit support is offered through the Rural Financial Counselling Service Tasmania (RFCST). The RFCST provides confidential and independent assistance to primary producers, fishermen and small rural businesses that are suffering financial hardship. Voluntary farm debt mediation is one of the service offerings provided.

Western Australia's Farm Debt Mediation Scheme

There are presently no moves afoot in Western Australia to follow in Queensland's steps and impose similar mandatory mediation obligations on financial institutions.

The WA Farm Debt Mediation Scheme came into existence relatively recently in 2015 but, unlike Queensland, New South Wales and Victoria, in Western Australia, mediation is not mandatory.

The Farm Debt Mediation Scheme in WA (WA Scheme) is overseen by the Department of Agriculture and Food and administered by the Rural Business Development Corporation. The WA Scheme provides eligible farming applicants the opportunity to participate in mediation with their credit provider by mutual agreement, provided the farmer is willing to contribute to the costs of the mediation.

Eligibility for the WA Scheme is based on the applicant having operated a farming enterprise for at least five years, and is only available for commercial farming loans (term loans, overdrafts, bank bills, commercial bills and equipment finance debt).

Applications may be submitted by financial institutions or farming and pastoral businesses that can demonstrate they have attempted to address their concerns with the other party prior to the making of the application. The WA Scheme is less formal than the mandatory schemes and is designed as a low cost, non-legal process. While the WA Scheme provides a forum for the airing of grievances, mediators have little power to compel active participation.


The upshot of the passing of Queensland's FBDM Bill is that credit providers will, in most circumstances, be unable to foreclose on farmers without first offering them debt mediation. By comparison, there is no power under the WA Scheme to compel parties to attend or participate in mediation.


1 ABARES Farm Debt: Broadacre and Dairy Farms, 2014-15 to 2015-2016. Department of Water and Resources.

2 Ibid.

3 Ibid.

4 Ibid.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

2015 AFR Beaton Client Choice Awards:
Best Law Firm (revenue $50m - $200m)
Best Professional Services Firm (revenue $50m - $200m)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions