Farmer-Lender Mediation extension clears House hurdle

Efforts to extend the Farmer-Lender Mediation Act’s sunset date by four years moved forward Wednesday, as the House Agriculture Policy Committee approved HF251, sending it to the House floor.

The bill, sponsored by Committee Chairwoman Jeanne Poppe (DFL-Austin), would change the expiration date of the act — which requires a bank or other creditor to offer mediation to a farmer before enforcing a debt secured by agriculture property — to June 30, 2017.

Although the law was enacted 27 years ago, during the farm crisis of the mid-1980s, Dr. Dick Senese, senior associate dean with University of Minnesota Extension — which coordinates the mediation process — said nearly 3,000 mediation notices, involving 1,087 farms, were received in fiscal year 2012, the fourth highest total in the last 10 years.

“Despite record and near record farm income in the last few years, for some farmers and their families, there are problems, often unforeseen, that can cause credit trouble,” Senese said. He explained the process “creates breathing room” for all parties while a solution is sought.

David Skillbred, vice president of government affairs for the Independent Community Bankers of Minnesota, spoke against the extension saying the act began as a response to “extraordinary times” but was supposed to be temporary.

“As one banker told me recently, ‘The farm crisis is over, our bank doesn’t need a law to make us negotiate with customers, that’s what we do,’” Skillbred said. He went on to say that while the extension would likely pass, as it had a dozen times over the years, his organization would like the amount of debt at which point mediation is triggered — currently $5,000 ­— raised.

In response, Rep. Andrew Falk (DFL-Murdock) noted that for smaller, often non-traditional farmers, mediation is important, as is the $5,000 threshold. “They don’t have the huge investments in equipment, or oftentimes fertilizer, or other inputs that may be seen in traditional agriculture, but it doesn’t mean they’re not farmers,” he said.

Rep. Paul Anderson (R-Starbuck) said everybody could agree things have changed since 1986, but anybody who puts seeds in the ground each year knows it is a risk. “That’s just an inherent part of agriculture,” he said.

The companion, SF253, sponsored by Sen. Dan Sparks (DFL-Austin), awaits action by the Senate Jobs, Agriculture and Rural Development Committee.