Extending farm mediation law

A bill expected to sunset in 1988 still sees the light of day, and could have its life extended.

The state’s agriculture economy was in crisis in 1986 when the Farmer-Lender Mediation Act was enacted, along with other initiatives to help farmers weather the bad times. The provision remains viable because every two years the Legislature extends its expiration date.

Rep. Al Juhnke (DFL-Willmar) sponsors HF841, which would extend the law’s sunset date to June 30, 2013. It was held over March 31 by the House Agriculture, Rural Economies and Veterans Affairs Committee for possible omnibus bill inclusion.

In 2008, more than 2,000 cases were opened to negotiate $156.3 million in farm debt, said Dick Senese, associate dean with University of Minnesota Extension, the agency that administers the program.

He said the average farm debtor seeking mediation service is 53 years old; has owned the land for 22 years; has an average net worth of $698,662; has an average agriculture debt of approximately $273,521; a median non-farm income of $34,074; and a median annual living expenses of $37,241.

Senese said that in 2008, statistics show that implement dealers and banks were owed the greatest amount by farm debtors.

Through the program, a creditor with a secured debt of more than $5,000 against an agricultural property must offer farmer-lender mediation before proceeding with foreclosure, repossession, contract cancellation or collection of a judgment.

Several members and testifiers said if the service is meant to address emergency situations, the threshold does not adequately reflect the cost of doing business and should be raised.

Others said that many new farmers are opting for smaller operations where a debt that size could be catastrophic. Juhnke said by extending the sunset, the Legislature would buy time to revisit the threshold.

A companion, SF289, sponsored by Sen. Sharon Erickson Ropes (DFL-Winona), awaits action by the Senate Judiciary Committee.