New Legislation for Farmers in Queensland regarding Business Debt Mediation matters

The Farm Business Debt Mediation Act 2017 (No. 7) (Qld) (the Act) was assented on 30 March 2017 and will improve the lives of farmers in Queensland by reducing their financial stress. The majority of the Act will come into force from 1 July 2017.

Changes Implemented from the Act

The Farm Business Debt Mediation Bill 2016 (Qld) (the Bill) was first introduced by the former Minister for Agriculture and Fisheries - Ms Leanne Donaldson in the Legislative Assembly on 30 August 2016. The Act, according to the secondary materials accompanying the Bill,  will improve the lives of farmers in Queensland by reducing their financial stress and  subsequently improves the  financial performance of Queensland's farming industry, particularly in relation to farm succession planning and renewal within the family farming sector.

The Act will abolish the Queensland Rural Adjustment Authority (the QRAA) and replace it with a new authority, which is called the Queensland Rural and Industry Development Authority (the QRIDA), to improve the farm business debt mediation process. The QRIDA will have powers to  compel banks and other rural lenders to provide up to date data on rural lending in order to publish a bi-annual Rural Debt Survey. The QRIDA will also compel the Minister to release the survey within three months of finalisation by the QRIDA. 

Some of the changes that will be further implemented from the Act include:

• the days by which a farmer has to ask for mediation must be no less than 20 business days after receiving a notice of intention to take enforcement action from the mortgagee;
• a farmer may have one or more advisors at a mediation meeting;
• mediation meetings are to be conducted at a place and time that is reasonably convenient for the farmer and may utilise communication technologies, such as teleconferencing and videoconferencing,  for mediation meetings to be held remotely rather than face to face;
• an original decision in relation to the issue of an enforcement action suspension certificate or exemption certificate will not be available for external review; and
• an external review is only available to individuals who had applied for an internal review of an accreditation decision and had received a review notice of the internal review decision.

Subsequent Other Amendments

The introduction of the Act also amends other laws in Queensland. The affected laws include:

• Rural and Regional Adjustment Act 1994 (Qld): the function of the QRIDA will be expanded to include providing advice on the financial performance of Queensland’s agricultural sector, undertaking policy research and partnering with the private banking sector.
• Biological Control Act 1987 (Qld) (the BC Act): prescribe viruses and sub-viral agents as organisms and prescribed organisms for the purposes of the BC Act in order the remove ambiguities in the current BC Act.
• Biosecurity Act 2014 (Qld): allow third party accreditation schemes to be recognised as a framework in order to issue biosecurity certificates.
• Drugs Misuse Act 1986 (Qld): allow Queensland growers and researchers to supply certain cannabis seed to certain individuals who have licensed to develop medicinal cannabis under the Narcotic Drugs Act 1967 (Cth).

Purposes of the Act

The Act was introduced in the first place to combat the unfair treatments of farmers by their mortgagees. The Act aims to ensure that there is consistency in farm debt mediation. The Act also strives to provide an efficient and equitable mediation process for the benefit of both the mortgagees and the farmers.

As other States and Territories in Australia agreed on implementing a national scheme for farm debt mediation based on the Farm Debt Mediation Act 1994 (NSW), the Act was introduced to align Queensland legislation with this scheme.

Criticisms of the Act

According to an article in Queensland Country Life, Katter Party Members of Parliament (MPs): Mr Rob Katter and Mr Shane Knuth voiced strong criticism about the introduction of the Act as the Act fails to address the real issue for farming rural debt. Although mediation is introduced in the Act, both MPs were concerned that the Act does not resolve the imbalance of power between the mortgagees and the farmers. Both MPs recommended establishing a royal commission into banking to resolve
this issue.

Both MPs were also concerned that the introduction of the Act will make it difficult for Queensland farmers to afford restocking, commenting:

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Farm Business Debt Mediation Bill 2016 (Qld) and Second Reading Speech and Explanatory Material as reported in the TimeBase LawOne Service

Farm Business Debt Mediation Act 2017 (Qld) as reported in the TimeBase LawOne Service

Katters say Palaszczuk falls well short of addressing rural debt crisis (Queensland Country Life)