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Extension of Farmer-Lender Mediation Act Passed by House

Wednesday, February, 20, 2013


This past Thursday, the Minnesota House of Representatives voted 124-5 for a four-year extension of The Farmer-Lender Mediation Act, a state law that was created to assist farmers who hit particularly difficult times financially due to decreases in yield or unforeseen weather conditions.  According to the stipulations of the Act, creditors of a secured debt worth more than $5,000 must provide the opportunity for mediation between the farmer and lender before going through with a foreclosure, repossession, collection or judgment against an agricultural property. 

In 2010, mediators were called in for 409 cases that fell under the auspices of the Act.  These cases involved 1,273 debt notices, with debt amounts totaling over $623 million.  The program has since seen a 9% increase in participation, with 3,064 new notices filed in 2010. 

Since its inception 27 years ago in the 1980s, the program has mediated over 3,000 cases concerning 1,087 farms.  This mediation program has seen such success in helping farmers keep their farmland that the House wanted to extend the expiration date of The Farmer-Mediation Act in hopes that it would continue to help Minnesota farmers who come across particularly difficult financial circumstances.  Since crop failures can be quickly followed by crop successes, and since most farmers have to rely on credit to keep their farming enterprise running, the Act provides the additional time needed for farmers to get back on their feet without losing the farmland and equipment that they have already worked so hard to attain. 

The extension of the expiration date of the Farmer-Mediation Act was sponsored by Jeanne Poppe (DFL-Austin) and is now on its way to the Minnesota Senate, where Sen. Dan Sparks (DFL-Austin) will work as the bill’s sponsor.  With such a success in the House, many anticipate that the Farmer-Lender Mediation Act extension will find the same successful vote in the Senate. 

According to Poppe, “The Farmer-Lender Mediation Act was enacted in 1986, when there was severe financial stress in the agriculture economy, and farmers across the state were in distress, and lenders as well were in distress trying to figure out how to actually assist the farmers.  The bill was enacted in order to allow the farmers and lenders to have a cooling-off period and in order to be able to mediate the dispute that they had in order to resolve the problems, in order to pay the bills and set up the payment plans.”