The effect of a good year for agriculture is evident as the number of lenders sending notices requesting mediation of troubled Minnesota farm debts dropped by 24% during the fiscal year ending Sept. 30, 2010.
This is the first time in four years that activity in the program has decreased, says Dick Senese, senior associate dean of Univer-sity of Minnesota Extension. The information is in the annual report of the university’s Farmer-Lender Mediation program.
"In recent years, farmer-lender mediation has given farm operations the chance to stay in business until better times," Senese says. "These are better times for agriculture, but there
are still situations where farmers and their lenders rely on this program to help them work together to renegotiate, restructure or resolve their debts."
The report shows there were 494 cases in which farm enterprises used mediation to reach agreement with lenders about debts. The amount of debt addressed in mediation dropped
by almost 65% from $624 million in fiscal year 2010 to $221 million in fiscal 2011.
Minnesota law requires that creditors with a secured debt of more than $5,000 against an ag property offer farmer-lender mediation before proceeding with foreclosure, repossession, cancellation of contract or collection of a judgment.
- March 2012