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Minnesota Debt Mediation Requests Nearly Double
11/5/2009
For the fiscal year ending September 30, 2009, the Minnesota Extension Farmer Lender Mediation program received 1,192 requests for mediation, an 86% increase from the prior year. The total debt involved in these requests was $322 million, more than double the previous years.
“Farmer Lender Mediation provides a way to re-structure debt and give the operation a chance to stay in business until better times,” says Brian Buhr, an Extension economist and head of the University of Minnesota’s Department of Applied Economics. “Mediation also helps other related businesses such as feed dealers, veterinarians and equipment suppliers who depend on livestock producers for income as well.”
Low livestock prices and ripple effects from the general economy are contributing to the troubled farm loans, with dairy and pork prices below the cost of production for more than a year on some farms,.
Minnesota law requires creditors with a secured debt of more than $5,000 against agricultural property before proceeding with foreclosure, repossession, cancellation of contract or collection of a judgment. To be eligible for mediation, a debtor must own or lease more than 60 acres and have more than $20,000 in gross sales of agricultural products the preceding year. Farmers offered mediation can take advantage of a 90-day period to work with their lenders to resolve issues.
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