Relief could be in the works for New Zealand’s bankruptcy farmers. Many farmers lost everything they owned and were put on the street after bankers evicted them from their properties. In many cases, police had to be called due to claims of assault.

There is ongoing dispute among the bank and farmers about the amounts owed and the process that led up to the evictions. But despite the vastly different claims about receivership, both sides agree there needs to be a better way to deal with farmers who are facing financial difficulties.

As a result, the government has decided to create a mediation system. It has been established through the Ministry for Primary Industries and comes at an annual of cost of as much as $300,000. The cost of each mediation session – about $6000 – will be shared between the bank and the farmer involved.

According to one rural mediator, rural mediator and Labour candidate, Janette Walker, states, "Banks actively wanting to get farmers off their properties. What people don't understand is the banks have capital adequacy ratios they have to meet for the Reserve Bank. When the ratio gets too narrow, between what they lent out and what they've got in the bank, they start looking at the bottom 25 per cent of all borrowings. They ask: 'Who can we get rid of?' It's as hard hearted as that, and then they start proceedings to get rid of them.”

According to Walker, the banks didn’t actually make farmers bankrupt but created "technical defaults.” In many cases, this got them to fold and voluntarily leave their land. Farmers were passed over to central-based management, so they were not working with local bankers, removing the personal aspect of the case.

Both sides are hoping mediation makes the situation easier on everyone.