OTTAWA – The government’s plan to change farm debt review boards into a mediation service faced more criticism last week from MPs who fear it will be less effective than existing programs.
MPs from all parties complained it will offer too little help to farmers heading for financial problems.
The new farm debt mediation act will concentrate on farmers who are insolvent and under threat of losing assets to creditors.
As a companion program, a farm consultation system will be created to offer referral to services that could help, including preparation of financial analysis and suggestion of alternatives.
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Too late to help
But during a hearing by the Commons agriculture committee Oct. 9, MPs questioned whether too much attention was being paid to farmers already too far in debt to be saved. They urged more emphasis on helping farmers whose operations can be salvaged.
“I think the intentions are very good with this bill,” said Reform MP Jake Hoeppner. “But you are going to waste a lot of money here.”
Liberal MP Wayne Easter was more scathing. He said the most important part of existing farm debt legislation is a section which allows farmers to ask for help before their money troubles hit crisis level.
The new legislation does not offer that option.
Easter criticized the government for reducing effectiveness of the program as a way to save money.
“It (the mediation proposal) looks and sounds great, like it should do the job,” he said. “But I have been in financial trouble … . From my own experience, this won’t do it.”
Government spokesperson Jerry Pickard defended the new program, arguing the mediation service will be more efficient. A farmer facing foreclosure can apply for help, he said.
The program administrator for the province would assign a financial expert to look at the situation, and a mediator to find a solution.
Foreclosure could be delayed for a maximum 120 days, in 30-day blocks. If the farmer was not happy with the final solution, he could appeal.
A panel of mediation specialists available for assigned cases would replace farm debt review boards.
Pickard, parliamentary secretary to the agriculture minister, said the new farm consultation service is meant to deal with some of the early-warning problem cases cited by critics.
Helpful advice needed
“If a farmer is in financial difficulty but not insolvent, there may be a need for financial advice to get them back on track,” he said.
However, an information package tabled with the committee said the government is considering attaching a user fee to the consultation service.
A farmer trying to climb out of financial problems might be expected to pay an “application fee” when asking for a financial assessment of his operation and would be expected to pay at least part of the cost of later consultations.
User fees are described in the documents as a way to help a financially strapped farmer.
“There appears to be value in getting the client to share in the cost of developing successful solutions,” says the government discussion paper. “Client sharing of program costs is also consistent with current fiscal constraints of governments.”
