OTTAWA – The government’s new farm debt mediation system moved a step closer to reality last week when a Commons committee approved it and sent it back to the Commons for final debate.
However, some MP skepticism surfaced as the Commons agriculture committee approved several amendments that will put the new program under more political scrutiny.
After two years, in 1999, the government will have to review the operations of the mediation program. Every three years after, another review will have to be done.
The Liberal majority on the committee rejected an opposition proposal that the study be done by the all-party Commons committee, rather than inside the agriculture department under the direction of the minister.
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The mediation service will replace the decade-old farm debt review program. It will offer help to farmers who are insolvent and facing seizure of their assets by creditors.
A companion program, not incorporated into the legislation, will allow farmers to seek advice from financial specialists before they fall into financial crisis.
It was the pre-crisis consultation program that attracted the unease of some witnesses and MPs.
They worried the new program might be geared too much to solving a crisis and not enough to helping avoid a crisis. The farm debt review board system has allowed farmers to apply for help when troubles start, long before they become critical.
Help along the way
Government officials told MPs the new consultation program should be effective in helping farmers with developing debt problems.
Just in case, though, the Commons committee added a clause to the legislation requiring that after two years of operation, the agriculture minister review the effectiveness of the crisis-avoidance service.
The new mediation program will have an annual budget of more than $4 million.
Although the rate of farm bankruptcies has fallen from the high levels of the late 1980s, hundreds of farmers still seek help each year to settle with creditors.
Under the new program, a farmer must be insolvent to apply for help.
A recovery proposal can be drawn up, at the farmer’s request, if there is to be an attempt to salvage the operation.
Once a farmer has been approved for the program, a mediator will be picked from a list of professional mediators available on a fee-for-service basis.
While mediation efforts are under way, the farm is protected from the creditors for at least 30 days, and for as long as 120 days if needed, to allow completion of mediation efforts.
