Farm Debt Mediation Bill

Second Reading

Adjourned debate on second reading.

(Continued from 3 November 2016.)

Mr WILLIAMS (MacKillop) (11:19): I am continuing on from 3 November, page 7630 in the Hansard, where I was talking in support of this measure brought to the house by the member for Hammond. I will not repeat what I said then, but I refer members and readers of the Hansard back to that page. I will go on to say that one of the reasons why I think this would be a good move is that it would mandate that banks, before moving to foreclose on a farmer, would be obliged to sit down with the farmer and go through a mediation process.

In my experience, this would provide a win-win situation. If the bank thought that it was going to increase its risk profile, I think it would encourage the bank to start the process a bit earlier. I do not think there is a problem there. It would certainly provide a win for the farmer, because I suggest that farmers quite often find themselves under financial stress and live in both fear and denial. If a process is started, it has been my experience and that of the financial counsellors who work in this area, that those farmers who address these issues earlier usually get a better outcome. I believe the earlier the matters are brought to a head, the better the outcome would be for the bank. I believe it certainly would be better for the farmer and the farmer's family, irrespective of the final washout.

I certainly commend this matter to the house. As I said, I think the government is not supportive of it. I am very disappointed by that. Both New South Wales and Victoria have this process in place, and my understanding is that it works very well in those states. I think our farmers in South Australia should be supported. Only this week, the Minister for Agriculture, Food and Fisheries claimed that he was supporting the farming community. From where I sit, I do not see it quite the same. I do not think this government gives our farming community, which is such an important contributor to the state, the sort of support that it deserves and indeed needs. I would urge the government to rethink its position on this.

Mr TRELOAR (Flinders) (11:22): I rise today to support the bill that has been brought to the parliament by the shadow minister for agriculture (Hon. David Ridgway) in the other place. I commend him for his work in this sphere because it is a part of agricultural business that needs addressing. The bill essentially looks to create a legally enforceable bank mediation mechanism for primary producers. As other speakers have said, these days farmers and primary producers often find themselves in multimillion dollar businesses and after just one or two or three poorer seasons or low wheat prices, for example, as we are seeing at the moment—I see the price of wheat has gone down every day this week and we are probably in what I would suspect is a 25-year low—all of these things put pressure on farm businesses.

Mediation is a structured negotiation process in which the mediator, as a neutral and independent person, assists the farmer and the creditor in attempting to reach agreement on the present arrangements and future conduct of financial relationships between them. It is so important in any business arrangements, but particularly when things get difficult, to come to the table. At the moment, sometimes they do and sometimes they do not. This would cause that negotiation to be enforced and, as the member for MacKillop has said, it ultimately would be win-win, both for the banks and for the primary producers involved.

Mr PEDERICK (Hammond) (11:23): I thank the members for MacKillop and Flinders, and the Hon. David Ridgway in the other place for bringing this bill to the parliament. As I said in my previous contribution, the purpose of this bill is to create a legally enforceable bank mediation mechanism for primary producers. With regard to the mediation, it is a structured negotiation process where the mediator, as a neutral and independent person, assists the farmer and the creditor in attempting to reach agreement on the present arrangements and future conduct of financial relations between them.

I note that in this state there is no legally enforceable bank mediation mechanism for primary producers. As has been stated, primary producers can come up against many hurdles in the running of their business, not the least of which is on the front of the Stock Journal today where the strong storm moved through the Murraylands and threw field bins on top of each other out at the Herrmanns' property at Perponda.

I note that the member for Waite, when speaking to this bill, made the argument that this is a problem that does not require a solution. I believe it is a problem that requires a solution. I am off the land. My family have been on the land since 1840 when they came out to this state. If the government are serious about our clean and green image and the future prosperity of our farmers, as they keep stating they are, they need to support this legislation to show that their words are not just noise in the background. I commend the bill.

Ayes 21

Noes 23

Majority 2