OTTAWA – The government decision to limit its proposed new farm debt mediation service to farmers facing insolvency has become the most contentious part of its plan to revamp the farm debt review board system.
Critics, including several government MPs, have complained there should be more help for farmers who are sliding into financial trouble but are not yet facing insolvency.
The farm debt review program allowed farmers to apply for help long before they were facing seizure of property by creditors.
“The National Farmers Union opposes any move to limit assistance under the farm debt mediation act to those farmers who are already insolvent,” NFU vice-president Chris Tait told MPs recently.
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Under the farm debt review system, up to 70 percent of applications were from farmers trying to avoid insolvency. “In many cases, (boards) helped them reach a resolution with their creditors that they likely would not have reached otherwise,” he said.
The government is promising a farm consultation service for just such cases, but it will not have a legislative base.
Last week, agriculture minister Ralph Goodale assured the House of Commons agriculture committee that his intention is to offer farmers a chance to avoid insolvency through preventive advice. The consultation service will do that, he said, and it should not be in the legislation because it might overlap with provincial mediation services.
But he also promised, in a letter to the committee, that if he is wrong he will reconsider the decision to keep preventive measures out of the legislation.
The committee will begin debate on the bill next week and Liberal MP and former NFU president Wayne Easter has said he plans to propose the consultation service be moved into the legislation.
CFA approves
However, the idea to make it a separate, non-legislative program also has its supporters, including the Canadian Federation of Agriculture.
President Jack Wilkinson told MPs that farmers who have applied under farm debt review for advice and help when financial problems first appear often have been penalized because creditors are notified and then start calling in loans to protect themselves. This makes the financial problems worse.
In fact, Bob Hadley, general manager of the Alberta Farm Debt Review Board, told MPs it is a good idea to separate the insolvency mediation from the pre-insolvency consultation and advice service.
Up to $250,000 of the consultation service’s $1.8 million budget will be used to promote the program and that will allow farmers to get help without the stigma of a formal application under the legislation, he said.
