Are you feeling stressed? Everything working against you–crops not off the field, corn still too high in moisture, increased drying costs, propane restrictions, breakdown of equipment? You are not alone!
On top of this, some agencies are reporting that financial institutions seem to be quick to pull the plug this year. There are many farmers who are struggling to get the crop off and compounded with the propane shortage, the pressures are becoming more than they bargained for.
In Eastern Canada, income typically comes in during the month of October for soybeans, allowing farmers to meet their payment schedules. This has now been pushed into December for many producers. Some in the agricultural community are now facing the added pressure of potentially having their financing pulled.
“We have had more calls in the past two weeks and expect that between now and February we will be swamped with calls,” says Dianne Guindon of Agriculture and Agri-Food Canada.
Farm Debt Mediation is a program available to agricultural producers, offered through Agriculture and Agri-Food Canada; it provides counselling and mediation services to farmers who are having trouble meeting their financial obligations. The program is voluntary and confidential.
The application process is designed to be user-friendly. The application requests your name, address, main commodity, and a listing of your secured and unsecured creditors.
The Farm Debt Mediation Service has two ways to assist farmers: One option is to meet with a debt counsellor to put together a plan to help you meet your obligations, or to evaluate and put a designated plan in place moving forward (Section 5(1)(b)).
The second option gives the farmer protection; collectors are prevented from taking action against the business for 30 days, with the possibility to extend this protection to a maximum of 120 days (Section 5(1)(a)); this allows the client time to get a financial plan in place and to allocate crop income. It prevents your collectors from taking action or putting more pressure on you until the crop is off and you have an opportunity to plan.
To be eligible for the program you must own a farm business and either: have stopped making your regular payments or have sold property but the value is not enough to cover your debt.
To apply to the Farm Debt Mediation program, contact the nearest Farm Debt Mediation office at 1-866-452-5556. You will be provided with the required paperwork to be completed and forwarded to them.
You will have to decide which service suits your needs. If you decide to go with Section 5(1)(b) and work with a counsellor and then realize that you need to have a stay put in place so that the creditors do not take action against your assets, you have the ability to change your application to Section 5(1)(a), further protecting your interests.
Applying to the program as soon as you realize you are in a difficult situation can assist in keeping the lines of communication open with your creditors; this can be used to protect you until the crop is off and sold, or until you can find a financial institution you can work with.
If a creditor has already filed a Notice of Intent, the Farm Debt Mediation process can stop them for 15 days to provide an opportunity for mediation.
Once you have submitted your application listing your creditors – secured and unsecured – you will meet with a qualified financial consultant who will work with you through the process. The consultant will visit your farm and assess your current
financial situation and assist in preparing a plan. The consultant will collect financial data from you and then contact your creditors to verify the amounts due to them. Once this process is completed, the consultant will meet with you and your creditors to negotiate a payment plan.
If you apply and qualify for the Section 5(1)(a), you will be offered a financial review, mediation and a stay of proceedings. During this time creditors may not begin or continue to take action against your assets.
Here are some legal details from the Farm Debt Mediation section of the Agriculture and Agri-Food Canada website:
“For creditors: a secured creditor, Section 21 of the Farm Debt Mediation Act, requires you to serve a farmer with a Notice of Intent by Secured Creditor before taking legal action to recover debts. You must wait 15 business days after the Notice of Intent by Secured Creditor is deemed to be effected before starting or continuing collection action. The farmer may choose to apply to the Farm Debt Mediation Service during this period, or at any time afterwards.
“For farmers: If you decide to apply and you qualify for Section 5(1)(a), you will be offered a financial review and mediation with a stay of proceedings, during which time creditors may not begin or continue recovery or seizure action against your assets. The stay of proceedings is initially issued for 30 calendar days but may be extended in 30-day increments to a maximum of 120 calendar days. If you decide to apply and you qualify for Section 5(1)(b), you will be offered a financial review and mediation without a stay of proceedings.”
The harvest time is always a very busy and stressful time with so many constraints on the farmer’s time. Meeting financial obligations is always a priority for farmers, but with the challenges the past five years, 2019 is one for the books! Don’t let creditor concerns eat away at you. Be proactive and protect your assets.