Farm Debt Mediation: What Happens Next and How Refinancing Works
Property Lending Hub
Before the notice · At mediation · After the agreement · If it fails
If your bank has ordered a valuation, cut a limit, sent a farm debt mediation notice, or you already have a payment date in a signed agreement, the right move depends on where you are in the sequence. This guide follows the whole farmer journey from early lender pressure through mediation, refinance and enforcement risk.
Quick Answer
Farm debt mediation is the statutory negotiation a creditor must offer before enforcing a farm mortgage, and five states have a scheme, not four. Respond by your state's deadline and use the free rural financial counselling service first. What you can refinance afterwards depends on the agreement.
Also called: rural debt mediation, farm business debt mediation (Queensland), FDM.
| What brought you here | What it may mean | Go straight to |
|---|---|---|
| The bank ordered a new valuation, cut the overdraft or moved the file to a specialist team | Risk may be being reassessed, but mediation or enforcement has not necessarily started | Early warning signs |
| Repayments are current but the bank says the farm loan is in default | A non-payment covenant, insurance, information or security-value issue may be the event of default | Default without missed repayments |
| A farm debt mediation notice arrived | A response clock is running and ignoring it can change the creditor's enforcement position | What to do with the notice |
| Mediation is booked | The next job is evidence, advisers and realistic settlement options | What to prepare |
| You are being asked to sign a payment, sale or refinance date | The date needs to be tested against valuation, payout, consent, credit and legal timing | What can be agreed |
| You already signed an agreement | The legal outcome now has to be turned into payments, sales or finance by the agreed dates | What happens after mediation |
| Mediation failed, an agreement was breached or an exemption certificate is in force | Enforcement risk is higher and every remaining complaint, review, sale and refinance path is time-sensitive | If mediation fails |
| The lender has security over land, machinery, livestock, water or more than one family entity | Different assets and obligations may not receive identical farm debt mediation protection | Which assets and guarantees are covered |
| Your home, a spouse, a guarantor or the next generation is involved | The farm debt may be only one part of the family's legal and security exposure | Guarantors and family |
What is farm debt mediation?
Farm debt mediation is a structured negotiation under state law that gives a farmer and a secured creditor a formal chance to resolve a farm debt before covered enforcement can proceed. An accredited mediator manages the discussion but does not decide the outcome, order a write-off or take either side's position.
Two contacts belong near the front of the queue. The first is the free Rural Financial Counselling Service, which can help rebuild budgets, cashflow and an action plan. The second is the authority administering the scheme in your state. A broker can test refinance options, but should not replace either the administrator or independent legal advice about the notice, mortgage or guarantee.
Australia does not use one national Farm Debt Mediation Act. New South Wales, Victoria, Queensland, South Australia and Tasmania have statutory schemes, while Western Australia does not have an equivalent statutory Act. On a cross-border facility, do not assume the governing-law clause in the loan agreement decides everything: the location and type of secured farm property, the relevant state Act and any corresponding-law provisions can all matter.
If an online summary is describing Canada's federal Farm Debt Mediation Act or a United States farmer-lender mediation program, it is not Australian law. For forms, certificate decisions and statutory deadlines, use the current state administrator. For the commercial problem that follows, map the agreement, security, valuation, guarantors and the date by which money or a sale actually has to settle.
What does it mean if the bank orders a valuation, cuts your overdraft or moves the loan to recoveries?
Those events can be warning signs that the lender is reassessing the farm's risk, but none of them by itself proves that enforcement has started. The combination matters: a fresh valuation, tighter working-capital limit, urgent request for financial information and a move to a specialist credit or recoveries team is a reason to get the file current before a formal default or mediation notice arrives.
Ask the bank in writing what concern it is testing: cashflow, arrears, a covenant, security value, loan-to-value ratio, missing information, a succession issue or the overall debt level. That answer tells you what evidence has to be prepared and whether the problem is primarily operational, legal, security-driven or refinance-driven.
| What has happened | What it can mean | What it does not prove | Best next move |
|---|---|---|---|
| A fresh rural valuation is ordered | The lender may be checking security coverage, LVR or preparing for a credit review | That the bank has decided to enforce | Ask why the valuation is required and reconcile the titles, water, debt and security schedule before it lands |
| The overdraft or seasonal limit is reduced or questioned | The lender may be tightening risk or testing whether the business can operate on less debt | That farm debt mediation has started | Update the monthly cashflow and quantify the working-capital gap before it becomes a payment problem |
| The relationship manager changes or the file moves to a specialist, credit or recoveries team | The account may be receiving a higher level of credit or recovery attention | That a receiver or mortgagee sale is imminent | Ask for the bank's concerns, current defaults and information requirements in writing |
| The bank asks urgently for accounts, livestock, crop, water or asset figures | The lender may be reassessing serviceability, security or compliance with an information covenant | That you should stop communicating | Use a rural financial counsellor, accountant and solicitor to make the figures consistent before they are supplied |
| A formal default, demand or farm debt mediation notice arrives | The matter has moved into a documented legal or recovery process | That the farm is already lost | Read the exact deadline, respond in writing where required and get legal advice immediately |
The wrong first reaction is often to apply everywhere for finance before knowing what has changed. The better sequence is to identify the bank's concern, repair the information pack, map the security and then test whether the existing facility can be stabilised or whether an exit actually needs to be funded.
Can my farm loan be in default even if I have not missed a repayment?
Yes. A farm loan can be in default even while scheduled repayments are current if another obligation in the loan or security documents has been breached and that breach is a ground for enforcement. A valuation, by itself, is not automatically a default; the question is what the facility and security documents say and what the applicable law treats as a default.
New South Wales expressly gives non-payment examples in its Farm Debt Mediation Act: failing to keep mortgaged property insured and failing to submit financial statements required by the creditor.
Queensland goes further in its statutory examples and includes a change in the debt-to-value ratio because the value of secured farm property changes. For a subscribing bank and a small-business loan, the 2025 Banking Code of Practice also limits action on non-monetary defaults and generally requires at least 30 days to remedy a remediable listed default, subject to exceptions such as insolvency or a material and immediate risk.
| Possible non-payment default | Why it matters | What to check now |
|---|---|---|
| Required financial statements are not supplied | A reporting covenant can itself be an enforceable obligation; NSW legislation expressly uses this as an example | The information clause, due date, any bank notice and whether the breach can still be remedied |
| Required insurance lapses | The lender can lose protection over the secured asset; NSW legislation expressly uses failure to insure as an example | Policy status, insured party, mortgagee notation and any cure notice |
| Security value or LVR changes after a valuation | Queensland legislation expressly gives an LVR change caused by farm-property value as an example of default | Your actual covenant wording, the valuation, debt balance and any right to cure or provide more security |
| Assets are sold, transferred or further secured without required consent | It can breach the loan or security package and change the lender's recovery position | Consent clauses, PPSR registrations, title dealings and where sale proceeds must be paid |
| Ownership, control, licence or permit changes | These can be listed non-monetary defaults in small-business bank facilities | Change-of-control terms, licences required to operate and any bank consent already given |
| Information or a warranty is materially wrong or misleading | It can be a contractual default even if payments are current | Exactly what was represented, whether it is material and what correction has been provided |
If the bank says you are in default but every repayment is current, ask it to identify the default clause, the event relied on, whether it is remediable and the date by which it says it must be cured. Do not assume that "no arrears" means "no default", and do not assume a valuation shortfall is automatically a default without reading the documents.
Primary sources: Farm Debt Mediation Act 1994 (NSW), Farm Business Debt Mediation Act 2017 (Qld) and the 2025 Banking Code of Practice.
What happens at each stage, from the first letter to enforcement?
A farm debt file usually moves through five practical stages: lender pressure, a mediation notice, the mediation itself, a signed agreement, and either completion of that agreement or enforcement if it fails. The right help changes at each stage.
| Stage | What it looks like | What decides the outcome here | What to do next |
|---|---|---|---|
| 1. Pressure, no notice yet | Annual review, a request for updated figures, a valuation ordered, the overdraft trimmed | Whether you can present a credible forward position before a default is recorded | Free counselling now, and get the accounts and cashflow current while you still have choices |
| 2. Notice arrives | A written notice from the creditor offering mediation, with a response form | Whether you respond inside the window, in writing | Diarise the deadline, say yes in writing, then prepare |
| 3. The mediation | An accredited mediator, both parties, usually one session | Whether a workable arrangement exists and whether the dates in it are achievable | Bring a solicitor for anything that will be signed, and test every date against how long funding takes |
| 4. Agreement signed | A heads of agreement setting out payments, sales or a refinance, with dates | Whether the required money can actually be funded by the date agreed | Start the funding conversation immediately, not a month before the date |
| 5. Mediation failed or agreement broken | An exemption certificate in force, and ordinary enforcement paths open | Security, equity and speed, rather than income | Get the security position read properly, and check whether a complaint path is still open |
Two of those stages are where money is lost quietly. At stage two the loss is a missed deadline. At stage four it is a date agreed in the room by people who have never watched a rural valuation and a credit decision run their course. Both are avoidable and neither is a legal problem.
Which Australian states have a farm debt mediation scheme?
Five states have statutory farm debt mediation laws: New South Wales, Victoria, Queensland, South Australia and Tasmania. Tasmania's Farm Debt Mediation Act 2024 received Royal Assent on 2 October 2024 and commenced on 4 December 2024, so current national summaries that still count only four legislated schemes are out of date.
Western Australia has no equivalent statutory Farm Debt Mediation Act. There is also a current government-page conflict: DPIRD's dedicated Farm Debt Mediation Scheme WA page records the voluntary 2024 to 2026 scheme as ending on 30 June 2026 and shows its status as Closed.
DPIRD's broader Rural Business Development Corporation page still lists Farm Debt Mediation under open schemes. If you are in WA, confirm current availability directly with DPIRD/RBDC rather than assuming the voluntary pathway is taking applications. Whatever voluntary service is available, WA does not have the statutory certificate bar used in the five legislated states.
No statutory farm debt mediation scheme has been identified for the Northern Territory or the Australian Capital Territory. On a file outside the five legislated states, get local legal advice rather than importing a NSW, Victorian or Queensland timetable.
| Jurisdiction | Act or current position | Administrator | Farmer's response window | Statutory certificate bar before covered enforcement |
|---|---|---|---|---|
| New South Wales | Farm Debt Mediation Act 1994 | NSW Rural Assistance Authority | 20 business days after receiving the notice inviting mediation | Yes; an exemption certificate must be in force |
| Victoria | Farm Debt Mediation Act 2011 | Victorian Small Business Commission | 21 days from the date of the offer to mediate | Yes; the creditor requires an exemption certificate |
| Queensland | Farm Business Debt Mediation Act 2017 | Queensland Rural and Industry Development Authority | 20 business days after receiving an enforcement action notice | Yes, where the Act applies, unless an exemption certificate is in force |
| South Australia | Farm Debt Mediation Act 2018 | Small Business Commission South Australia | 21 days from the date the notice was given | Yes, where the Act applies |
| Tasmania | Farm Debt Mediation Act 2024, commenced 4 December 2024 | Farm Debt Mediation Commissioner | 20 business days after receiving the notice inviting mediation | Yes; an exemption certificate must be in force |
| Western Australia | No statutory Act; dedicated 2024 to 2026 voluntary scheme page now says Closed, while a broader RBDC page still lists the scheme as open | DPIRD / Rural Business Development Corporation; mediation under the recent scheme was conducted by SBDC | No statutory response window | No equivalent statutory certificate bar |
| Northern Territory | No statutory farm debt mediation scheme identified | No farm debt mediation authority identified | Not applicable | No statutory FDM certificate bar identified |
| Australian Capital Territory | No statutory farm debt mediation scheme identified | No farm debt mediation authority identified | Not applicable | No statutory FDM certificate bar identified |
The practical rule is simple: use the state Act and administrator for the secured property in your file, not a generic national summary. That is particularly important in Tasmania and Western Australia because the public guidance landscape changed recently and is not internally consistent.
Which state's farm debt mediation rules apply if you farm across a border?
Start with the location and type of each secured farm asset, not just the governing-law clause in the loan agreement. A cross-border facility can involve more than one legal regime, and both New South Wales and Queensland expressly contemplate mediation under a corresponding law where the same farm debt is secured by farm property in more than one state.
New South Wales section 14 is a useful example. It recognises a situation where the farm debt is secured over farm property in another state or territory and in NSW and equivalent satisfactory mediation has taken place under a corresponding law. That is very different from saying that one state's certificate automatically travels across every asset in the facility.
Cross-border case: governing law was not enough
In Musumeci Property Investments Pty Limited as trustee for the ABC Discretionary Trust v National Australia Bank Ltd & Ors [2024] NSWSC 43, the borrowers had more than $9 million of finance connected with a Northern Territory mango operation.
Several finance and security documents were governed by NSW law, but the relevant secured farm property was wholly in the Northern Territory. The Supreme Court of NSW held that the NSW Farm Debt Mediation Act did not extend to that enforcement merely because documents were governed by NSW law, and the challenge to the receivers' appointment failed.
For a cross-border farm, build a security map before assuming one mediation deals with everything. List each land title, water entitlement, machinery or PPSR security, borrower or trustee, guarantor and the state where the secured property sits. Then ask which Act applies to each enforcement step and whether a corresponding-law provision avoids duplicated mediation for the same debt.
Primary NSW source: Farm Debt Mediation Act 1994 (NSW), including s 14. The case citation is Musumeci [2024] NSWSC 43.
Which farm assets, debts and guarantees are actually protected by farm debt mediation?
Not every asset in a farming group is automatically protected simply because the main loan is called a farm loan. Statutory protection follows the definitions in the relevant state Act and the actual security package: who owes the debt, what property secures it, whether the obligation is a guarantee and which enforcement action the creditor proposes to take.
| Asset or obligation | Is it automatically covered? | What decides it? |
|---|---|---|
| Farmland | Commonly covered, but not merely because it is rural land | It must fall within the state definition of farm property and secure a qualifying farm debt |
| Farm machinery | Can be covered | State definitions differ; NSW includes qualifying hire-purchase interests, while Queensland and Tasmania expressly include farming machinery or equipment within farm property |
| Water licences, allocations or irrigation rights | Can be covered | NSW, Queensland, Tasmania and South Australia expressly recognise relevant water rights or irrigation rights in their statutory or official scheme descriptions |
| Farmer's guarantor obligation | Sometimes expressly covered | NSW and Tasmania expressly include obligations of the farmer as debtor or guarantor in the farm-mortgage definition; other state wording must be checked separately |
| Livestock, crop or wool security | Highly state-specific | NSW excludes a stock mortgage and crop or wool lien from its farm-mortgage definition; Tasmania expressly includes them |
| Leased farm machinery | Highly state-specific | NSW excludes the lessor's interest in leased farm machinery; Tasmania expressly includes the lessor's interest |
| GSA or PPSR security over personal property | Do not assume | The collateral, grantor, priority and state FDM definitions all need to be mapped; a PPSR registration is not automatically the same thing as a protected farm mortgage |
| Spouse's, parent's or adult child's home | Do not assume it is protected with the farm | Read the separate mortgage, guarantee and state statutory scope; the family member may have exposure even where the house is not farm property |
| Company or trustee borrower | Potentially | Several schemes include corporate farmers; a trust file turns on the legal borrower or trustee, land owner, debt purpose and security rather than the label "family trust" |
| Private or non-bank creditor | Do not assume it is excluded | The statutory definitions of creditor or mortgagee, farm debt and farm mortgage matter more than the lender's marketing category |
The NSW-versus-Tasmania contrast is the warning. Both laws protect farm debt, but their farm-mortgage definitions do not treat stock, crop, wool and leased machinery the same way. South Australia's current guidance is narrower again, stating that its Act applies to farm mortgages covering a farm or part of a farm, farm machinery, or water or irrigation rights, with guarantors needing to be informed and involved.
If the lender has a first mortgage over land, a GSA, PPSR registrations, water security and a separate mortgage over a family home, do not ask only "am I in farm debt mediation?" Ask which enforcement right against which asset is actually caught by the Act? That is the question a solicitor should answer before a mediation agreement releases, sells or substitutes any security.
Primary sources: NSW Act, Tasmania Act, Queensland Act and SA Small Business Commission.
What do I do when the bank sends a farm debt mediation notice?
Respond inside the window on the notice, in writing, on the approved form for your state. The window is short and missing it is the single most expensive mistake available on this page, because a non-response is itself a ground for the creditor to be granted an exemption certificate.
- Diarise the deadline the day the notice arrives. New South Wales, Queensland and Tasmania give the farmer 20 business days. Victoria and South Australia both give 21 days from the day the notice was given.
- Call the free counselling service before you call anyone else. A rural financial counsellor will build the position statement the mediation runs on, at no cost to you.
- Get the file straight. Titles, the security package, plant and livestock schedules, the last two years of accounts, and a cashflow that separates a bad season from a structural problem.
- Say yes to mediation in writing even if you are not ready. Agreeing preserves the protection. Preparation can continue afterwards.
- Only then bring in finance. A broker is useful once you know what an agreement would need to deliver, and useless before that.
A grazier receives a notice inviting mediation, reads it as a formality from the bank's lawyers, and puts it aside to deal with after weaning. The response period runs out. Nothing dramatic happens for weeks.
What has actually changed is that the creditor now has a ground to apply for an exemption certificate on the basis that the farmer did not respond, and that certificate lifts the statutory bar for years rather than months. The mediation was never the risk. The calendar was. If a facility is also being called in on the business side, the two clocks run at once and neither waits for the other.
What documents should I prepare for farm debt mediation?
Prepare one pack that explains the debt, the security, the farm's current trading position and the options you can realistically deliver. The mediator does not decide the case for you, so the quality of the information matters because it gives both sides something concrete to negotiate from.
At a minimum, put these in one folder before the session:
- The debt and security documents. Facility letters, loan and mortgage documents, guarantees, recent bank correspondence, default notices, mediation notices and the latest payout or balance information you have.
- The property map. Titles, recent valuations, water entitlements, leased land, and a note of which asset secures which facility.
- The operating assets. Plant and equipment, livestock, crop or production schedules, and any separately financed assets.
- The financial position. Recent tax returns and financial accounts, current assets and liabilities, and a cashflow that runs for at least the next year and shows seasonal assumptions.
- The family and entity map. The borrower, landowner, trustee or company, directors, anyone who has signed a director's guarantee, spouse exposure and any succession arrangement that would be affected by a sale or refinance.
- Your proposed options. What can be paid now, what can be sold without breaking the farm, what could be refinanced, what time is genuinely needed, and what outcome is not workable.
Queensland makes part of this unusually explicit: its Act allows the farmer to request relevant debt and mortgage documents from the mortgagee, and requires the farmer to provide a recent tax return, assets and liabilities, and cashflow projections for at least one year. Other states use different procedures, so use the administrator's current forms for your jurisdiction.
If somebody who has never seen the farm can read the pack and answer five questions, what is owed, what secures it, what the farm earns, who else is exposed and what can happen next, you are ready to negotiate. If they cannot, the mediator will spend the day discovering the file instead of resolving it.
Can I start farm debt mediation myself before the bank does?
Yes. Every statutory scheme allows farmer-initiated mediation as well as creditor-initiated mediation, and in New South Wales the Act deals with it in its own provision at section 18B. The authority there states plainly that farmers may initiate mediation whether or not they are in default on a secured farm debt.
That last part is the sentence most farmers never read. You do not have to be behind to ask. If the bank has moved your file to a different team, ordered a valuation you did not ask for, or trimmed a limit twice in a year, mediation is available to you as a structured negotiation rather than as a last rite.
The same authority notes something else worth knowing: farming families and businesses may find mediation useful for resolving business or succession planning disputes, not only debt disputes. Where a handover is stuck because the debt is stuck, that is not two problems, it is one, and the mediation table is a cheaper place to work on it than a solicitor's office.
A dairy operation is not in default and has never missed a payment, but the facility is now being managed by a team the family has never dealt with and the overdraft has been cut twice. Nothing has been served. The family assumes there is nothing to do until something arrives.
Requesting mediation in that position changes who sets the agenda. The numbers are prepared rather than demanded, a rural financial counsellor builds the position statement at no cost, and the conversation happens before a default event exists to be recorded. It is the only point in the whole sequence where the farmer, rather than the calendar, controls the timing.
Two cautions. A creditor is not obliged to agree to a farmer's request in every scheme, and what happens next depends on your state's Act, so ask the administrator how a refusal is treated before you rely on it. And a request is not a hardship application. If the immediate problem is a payment you cannot make next month, raise that separately and in writing.
Can the bank take the farm while mediation is on foot?
Where a statutory farm debt mediation Act applies to the debt and mortgage, a creditor generally cannot take the covered enforcement action unless the required exemption certificate is in force. The exact bar, exceptions and certificate mechanics are state-specific.
The Acts put the bar the same way. In New South Wales a creditor must not take enforcement action in respect of a farm mortgage unless an exemption certificate granted to the creditor is in force, and enforcement taken in contravention of the Act is void. Tasmania uses almost the same language, South Australia voids enforcement taken otherwise than in compliance, and Queensland bars a mortgagee from enforcing unless the Act does not apply or an exemption certificate is in force.
The certificate is the thing to watch, because it is the creditor's permission slip and it lasts a long time. An exemption certificate runs three years in New South Wales, Queensland, Tasmania and Victoria. South Australia is the exception: where the notice was given under its section 8, the certificate ends three years and three months after the date of that notice. Expiry does not rescue you from proceedings already started while it was in force.
One definition catches people out. In New South Wales a farm mortgage includes an interest in, or power over, farm property securing obligations of the farmer whether as debtor or guarantor, and the definition also reaches certain farm machinery arrangements.
Tasmania also reaches guarantor obligations, but its farm-mortgage definition is not identical to New South Wales and extends to additional forms of farm security. So do not assume that plant, stock, crop or guarantee security is treated the same way across state lines. If a guarantee has already been called, map the document and the state Act before assuming it sits inside or outside mediation.
Who is the farmer if the land is held in a family trust?
Most Australian farms are not held personally, and the Acts define a farmer as a person or corporation engaged in a farming operation. A trust is not a separate legal entity, so the trustee is the party that holds the land and carries the obligations, which is usually a corporate trustee with the family behind it. That structure does not put you outside the Act, but it does change who must be served, who signs, and whose director's guarantee is exposed. Get that mapped before the mediation, not during it.
How long does farm debt mediation take?
There is no single Australian completion deadline. New South Wales says it is reasonable to expect mediation to be completed within about three months from the invitation, Tasmania encourages completion within three months of starting, and Victoria says mediations usually happen within twelve weeks of the commission receiving the creditor's notification. Individual notice, document, cooling-off and certificate periods are fixed separately.
That distinction matters more than a headline number. The dangerous assumption is not that mediation is slow. It is that the dates inside a signed agreement were set with the funding timetable in mind, when in almost every case they were set to suit the room.
| Step | Fixed by statute | How long |
|---|---|---|
| Responding to the creditor's notice | Yes | 20 business days in New South Wales, Queensland and Tasmania; 21 days from the day the notice was given in Victoria and South Australia |
| South Australia, creditor's wait before enforcing | Yes | 21 days after giving the notice |
| Appointing the mediator and setting a date | No | Depends on the panel, the parties and the season |
| The mediation itself | No | Commonly a single day, which is why South Australia prices its subsidy per party, per day |
| Cooling off after signing an agreement | Yes, in New South Wales and Tasmania | Until 5pm on the 10th business day after the agreement is entered into |
| Queensland, mortgagee silence after a request to mediate | Yes | 15 business days, after which the farmer's suspension certificate clock can start |
| Delivering what the agreement requires | No | Whatever date was agreed, which is the date most files fail on |
Read the last row against the third-last one. You may have ten business days to change your mind about an agreement, and a valuation, a payout figure and a credit decision take considerably longer than ten business days to line up. That gap is the reason to test a proposed date in the room rather than after it.
What does farm debt mediation cost?
The mediator's cost ranges from a heavily subsidised fixed contribution in Victoria and South Australia to shared or panel-based fees in other statutory schemes. The larger personal expense is often the preparation around the session: legal advice, accounting work, valuations, travel and the time needed to build a credible proposal.
| State | Published mediator cost position | What the farmer still pays | What to check before booking |
|---|---|---|---|
| New South Wales | Parties share the mediator's costs unless they agree otherwise; approved mediators publish their own fee schedules | Your own advisers, preparation, travel and the agreed share of mediation costs | The current RAA mediator profile and fee schedule |
| Victoria | $195 per party for a farm debt mediation session; the Victorian Government subsidises the balance | Your own travel, preparation and professional advisers | Current VSBC fee information if more than one session may be required |
| Queensland | Each party pays its own costs and half of the mediator's fee and costs; mediator rates vary | Your advisers and your half-share of mediator and related costs | The selected mediator's current rate and travel terms |
| South Australia | $195 per party, per mediation day or part-day; the Commission may partly or wholly waive the fee at its discretion | Your own advisers and costs outside the Commission's mediation fee | Whether the matter is likely to require more than one mediation day |
| Tasmania | The state says mediation averages about $6,000 total, or about $3,000 each if split equally; mediator rates vary | Your own advisers and any share of mediator, travel or venue costs | Current mediator fees and whether Farm Debt Mediation Grant support is available |
| Western Australia | No statutory scheme; the dedicated 2024 to 2026 voluntary scheme page now shows the program as Closed from 30 June 2026 | Depends on whatever current voluntary service, if any, is confirmed by DPIRD/RBDC and on advisers used | Current availability first, because another WA government page still lists Farm Debt Mediation as open |
There is no honest single national cost figure. Victoria currently publishes $195 per party for a farm debt mediation session, South Australia publishes $195 per party per mediation day, and Tasmania publishes an average total cost of about $6,000. In NSW and Queensland, the selected mediator and the way costs are shared matter more.
Get a written estimate from your solicitor and accountant before the mediation. The session can be cheap while the preparation is expensive, especially where the file has multiple titles, water, companies or trusts, guarantees and a refinance or partial-security release to test.
Who attends a farm debt mediation?
The farmer, the creditor's representative and an accredited mediator, plus whichever advisers each side brings, and a support person if you want one. Getting that mix right before the day changes how the session runs.
The free tier is genuinely good and badly underused. A rural financial counsellor is funded to sit with you, build the numbers and negotiate with the lender. In Queensland there is a second free pathway: the authority runs a farm debt restructure office whose farm business analysis assistance is described as a free, no obligation service giving primary producers an independent report on their position and their options.
Free to you
- Rural financial counsellor, budgets, action plan, lender negotiation
- The scheme administrator, process guidance and forms
- Queensland only, the farm debt restructure office analysis report
- A support person, family or a trusted adviser sitting with you
You pay, and should still bring
- A solicitor, for anything that will be signed on the day
- Your accountant, for the tax consequence of any restructure
- A valuer, where a security split is being proposed
- A broker, once the agreement's funding requirement is known
A broker's job here is narrow and worth being honest about. We cannot mediate, we cannot advise on the legal effect of a heads of agreement, and we should not be the first call. Where a broker earns a seat is after the shape of the deal is known, pricing whether the required payment can actually be funded and by whom. If you want to test that early, talk it through with a broker first rather than committing to a structure in the room.
If you are the adviser rather than the farmer
Accountants, solicitors and rural financial counsellors read this page as often as farmers do, usually with a specific client in mind and a date already fixed. The useful question to bring is not who lends to farmers, it is whether this particular security package can be valued and separated inside the window your client has agreed to. That is answerable in a phone call from the titles and the agreement, before anyone signs anything.
What can be agreed at farm debt mediation?
A broad range of debt outcomes can be negotiated if both sides consent, but the mediator cannot impose them and the creditor is not obliged to forgive or reduce the debt. The useful test is not whether an outcome sounds attractive in the room; it is whether the farm, the security package, the family and any incoming funder can actually deliver it by the date written into the agreement.
| Outcome being discussed | What it may solve | What must be tested first |
|---|---|---|
| More time or revised repayment dates | A seasonal or temporary cashflow problem where the enterprise remains viable | Whether the revised dates match the production, harvest and cash cycle and what happens at the end of the period |
| Interest-only payments or temporary payment deferral | A short-term cashflow squeeze without permanently reducing principal | How long it lasts, whether interest capitalises and what the repayment jump is when the concession ends |
| Capitalising arrears or interest | Removes an immediate cash payment by adding it to the debt | The new balance, interest cost, LVR, serviceability and whether the lender will formally vary the facility |
| Waiving default interest or fees | Stops penalty pricing from making recovery harder | What is actually waived, for what period and whether a Banking Code drought or natural-disaster rule separately applies |
| Debt compromise or partial write-off | A negotiated final settlement where the creditor accepts less than the contractual balance | The creditor's consent, source and timing of the lump sum, tax/accounting consequences and exact release wording; there is no right to a write-off merely because mediation occurs |
| Refinance or payout by a fixed date | Exits the existing creditor while retaining the farm or agreed assets | Valuation, lender appetite, payout figure, security releases, guarantors, legal documents and a settlement window the new funder can actually meet |
| Sell one title, water entitlement or other asset | Reduces debt without selling the whole farming operation | Whether the creditor will release that security, valuation, tax, sale costs, water or title transfer rules and the net debt reduction |
| Orderly sale of the farm or an agreed part | Creates a controlled exit where continuing the present debt is not viable | Marketing period, minimum net payout, interest while the sale runs and what happens if the sale is late or below expectation |
| Release, cap or substitute a guarantee or security | Reduces family exposure or separates a succession asset from the debt | Creditor consent, replacement security, fresh valuations, every affected party's agreement and independent legal advice for guarantors |
The 2025 Banking Code separately lists possible financial-difficulty assistance such as temporary interest-only arrangements and payment deferrals for customers to whom the Code applies. Farm debt mediation can go wider because it is a negotiation about the debt and security, but the same principle applies: get every concession, waiver, release and date into the written agreement rather than relying on what was said in the room.
New South Wales and Queensland also make an important good-faith point: a creditor's refusal to reduce or forgive debt does not, by itself, prove a failure to mediate in good faith. Mediation creates the opportunity to negotiate a compromise; it does not create an entitlement to one.
What does the bank want to see before it agrees to a farm debt restructure?
A lender assessing a post-mediation restructure or refinance wants to see the signed outcome, current farm cashflow, a clear security and valuation position, and an exit that can actually meet the agreed date. The explanation matters less than whether the documents prove those four things.
Four things carry the file. Whether the proposed agreement can be met by a settlement rather than by a hope. Whether the security package can be valued and, if it needs to be, split. Whether the cashflow shown is seasonal or structural, which the file has to make explicit rather than leave to the reader. And whether the exit is real: an exit that depends on selling the land the loan is secured against is not an exit, it is a delay with a longer name.
From our broking, general observations
What a credit desk reads first on a post-mediation farm file, in roughly this order:
- Whether there is a signed heads of agreement, and whether its conditions can be met by a settlement
- Whether the security can be valued and separated, since one title carrying the house, the sheds, the country and a separately registered water entitlement is a different proposition from four titles
- Whether the cashflow reads as a bad season or as a structurally unprofitable enterprise
- Whether the exit stands on its own without selling the secured land
What tends to sink them: an unresolved guarantor position, particularly where a family member's own home sits behind the farm debt; an exemption certificate already on foot, which compresses the timetable past what a genuine refinance can deliver; and security that cannot be split, so a partial move is impossible and the whole facility has to shift at once.
General observations from broking practice, not advice, not an offer, and not a prediction about your file. Outcomes depend on lender policy and your circumstances at the time of application. This is not financial advice and not legal advice.
What is a heads of agreement, and can you get out of one?
A heads of agreement records the main points settled at mediation and can create binding obligations once the relevant signing and cooling-off rules are satisfied. New South Wales deals with mediation agreements at section 18K and the cooling-off period at section 18L, and New South Wales and Tasmania both use a 10-business-day cooling-off framework, and Queensland also provides a cooling-off period that is normally 10 business days unless the parties agree to waive, shorten or extend it. Get legal advice before waiving or shortening any cooling-off right.
What it usually contains is a set of obligations with dates on them: a payment, a sale, a refinance, a reporting cycle, sometimes all four. What it does not contain is any obligation on the creditor to keep waiting if a date is missed. A breach puts the parties back into the enforcement pathway, not back into mediation.
Queensland runs a variation worth knowing about. An exemption certificate tied to a heads of agreement there can run until the farm business debt is discharged or stops being secured by the farm mortgage, which is capable of being longer than the usual three years. Treat a missed milestone the way you would treat a covenant breach, which means getting advice before the date rather than after it.
The practical test to apply on the day is simple. For every date in the draft, ask what has to happen in the weeks before it, and whether anyone in the room has actually confirmed those things can happen. A date nobody has tested is the most common defect in an otherwise sensible agreement.
What happens after farm debt mediation?
After mediation, the file usually moves into one of five practical outcomes: perform the agreed repayment plan, complete a refinance, complete an agreed asset sale, keep working through an agreed standstill or restructure, or move back toward enforcement if no agreement was reached or a signed obligation is breached. The mediation day is therefore not the finish line; it is the point where the next timetable starts.
| Where mediation ended | What happens next | What you should do immediately |
|---|---|---|
| Repayment or restructure agreed | The new payment, reporting or review obligations start on the dates in the agreement | Put every date into a calendar and make sure the cashflow supports the first twelve months, not only the first payment |
| Refinance agreed | A lender, valuer, outgoing bank and solicitors now have to complete the payout inside the agreed window | Start valuation, payout, security and credit work immediately and escalate any date that is unrealistic before it becomes a breach |
| Asset sale agreed | The sale process runs while interest and other obligations may continue | Confirm which security will be released, the minimum net payout and what happens if the sale is late or below expectation |
| No agreement reached | The creditor may seek an exemption certificate and, once entitled, move toward ordinary enforcement | Check review rights, complaint options, the security documents and whether a refinance or orderly sale is still realistic |
| Agreement later breached | The creditor may rely on the agreement, mortgage and certificate position to resume recovery or enforcement | Get advice before the missed milestone if possible; after the date, obtain the exact cure or enforcement position in writing |
For a farmer who searched "what happens after farm debt mediation", this is the real answer: a legal process turns into a delivery problem. Payments have to clear, titles have to be released, buyers have to settle, valuations have to come in and incoming lenders have to approve. The quality of the agreement is measured by whether those things can actually happen by the dates written into it.
Can you refinance out of a mediated farm debt?
Yes, a mediated farm debt can sometimes be refinanced, but approval depends on the security, repayment capacity or exit, and whether the settlement deadline gives the incoming funder enough time. On urgent files, time can be the binding constraint even where there is substantial equity in the land.
The lender class matters less than the sequence of work. A major bank may have the cheapest long-term structure but need a full serviceability and credit process; an agricultural specialist may be more comfortable with seasonal income; a private funder may move faster where security and exit are strong; and a second-position funder only works where the first mortgagee, valuation and priority position allow it. Where a shed complex, depot or shop in town carries part of the exposure, commercial property finance can be the cleaner route for that leg while the farmland is dealt with separately.
| Funder class | What it assesses first | Typical security | Where it fits |
|---|---|---|---|
| Major bank | Serviceability, conduct, signed agreement and whether the business is bankable after the restructure | Usually first mortgage over farmland and other agreed security | Long-term refinance where there is enough time and the farm meets policy |
| Agricultural specialist or non-bank | The enterprise, seasonal cashflow, security and the reason the existing facility has to move | Usually first mortgage over rural property, sometimes with additional security | Where the farm story needs specialist assessment and the security is workable |
| Private funder secured on rural land | Security, LVR, exit and settlement timetable | First or sometimes second mortgage over acceptable property | Short-term cover where a fixed payout date cannot wait for a slower mainstream process |
| Government concessional lender | Eligibility, commercial-debt rules, serviceability and security | Security coordinated with the existing commercial lender | Alongside commercial debt, not as a complete replacement for it |
| Second-position funder | First-mortgagee consent or priority mechanics, valuation headroom and exit | Second mortgage or other agreed subordinated security | Part payment where the whole first-mortgage facility is not moving immediately |
What has to happen before a farm debt refinance can actually settle?
| Critical step | Why it can delay settlement | What to have ready |
|---|---|---|
| Signed mediation agreement and exact payout obligation | The incoming funder must know the amount, conditions and hard date it is trying to meet | Signed agreement, all variations, certificate position and a calendar of every milestone |
| Current payout figure and discharge instructions | The debt can change during assessment and the outgoing lender controls its discharge process | Written payout request, current balance, discharge form and contact point |
| Title and security map | Cross-collateralised titles can make a partial refinance or partial sale impossible without consent | Current title searches, mortgage schedule, guarantees, GSA and all related security |
| Rural valuation | A lower value can change LVR, approved amount or lender appetite after weeks of work | Property details, leases, improvements, production information and water schedule |
| PPSR and personal-property security review | Machinery, livestock, crops or other collateral can have competing secured interests | PPSR searches, equipment finance schedules and details of assets being released or retained |
| Water entitlement security or dealing | Water can be separately registered, valued and released from security | Current water-register searches, entitlement details, valuations and release requirements |
| Guarantor and partial-security release | A new lender cannot assume an outgoing bank will release one title, one home or one guarantor on the terms needed | Written proposed release, replacement-security position and independent advice for affected guarantors |
| Incoming credit approval and conditions | Approval can still be conditional on valuation, tax returns, cashflow, insurance, legal due diligence or consents | A complete application pack and one person tracking every condition to satisfaction |
| Loan documents, priorities and consents | Deeds of priority, intercreditor documents or first-mortgagee consents can create a legal bottleneck | Solicitors instructed early and all lender/security parties identified before approval |
| Settlement booking and mortgage discharge | Approval is not settlement; documents still have to be signed, verified and coordinated with the outgoing lender | Executed documents, verified identities, settlement agent/solicitor and a booked settlement date with contingency |
A useful reality check comes from the Regional Investment Corporation's current loan pathway. Its published examples range from a clean file settling within a couple of months, to an "average" example approved within a 50-day target and settling about six weeks later, to a complex security file taking around four months. Those are RIC examples, not universal lender promises, but they show why a 30-day payout date can be impossible even when the security and lender appetite are otherwise workable.
Water and personal-property security are not side issues. A separately registered water entitlement may require its own valuation and release, while machinery, livestock and crops can involve PPSR or equipment-finance interests that have to be understood before settlement. If only part of the security is moving, obtain the outgoing lender's release position early rather than assuming it will accept a partial payout.
Where the date is genuinely too short for the intended long-term lender, a short-term facility secured on acceptable property may sometimes cover the timing gap. That only works if the exit from that facility is credible from day one; otherwise the refinance has moved the deadline rather than solved the debt.
Are there government loans that refinance farm debt?
Yes. Regional Investment Corporation farm-business loans can refinance eligible commercial debt, but they are not designed to replace all commercial debt. RIC's current rule is that, after the RIC loan, at least 50 per cent of total debt must remain commercial debt, and the maximum for its principal farm-business loan products is currently $2 million subject to each product's eligibility and terms.
Two structural points sit alongside the arithmetic. Where part of the exposure is commercial rather than agricultural, for example a shed complex or a shop in town, commercial property finance may be the cleaner route for that leg while the farmland is dealt with separately. And where the country sits in a postcode mainstream credit treats cautiously, how rural postcodes are assessed is worth reading before you assume a valuation problem is a policy problem.
That 50 per cent rule works differently when the RIC money refinances existing debt compared with when it funds new debt. Refinancing removes debt from the commercial side while adding it to the concessional side, so it uses the test faster.
| What the concessional loan is used for | Maximum RIC loan in the published example | Why |
|---|---|---|
| Refinancing existing commercial debt | $400,000 | After the refinance, at least half of the total debt still has to remain commercial |
| Taking on new eligible debt | $800,000 | The existing $800,000 commercial balance remains in place while the new RIC debt is added |
RIC publishes that exact $800,000 example in its June 2026 commercial-debt explainer. Its Farm Investment Loan can be used to refinance existing debt, while the AgriStarter Loan can refinance eligible farm-business loans in succession arrangements. Product eligibility, interest rates and permitted uses change, so read the live product page rather than treating a worked example as an approval rule.
RIC also requires commercial-lender support and security, which is why its application cannot be treated as a last-minute payout substitute. Its current pathway examples show that security negotiations with an existing bank can materially extend the time to settlement.
Queensland has a different state support pathway through QRIDA, including farm business analysis and debt-restructure support. Those services can help determine whether the enterprise is viable and what options exist, but they are not the same thing as a guaranteed refinance facility.
Current RIC sources: commercial debt explainer, loan pathway and Farm Investment Loan.
What happens if the mediation fails?
If mediation does not resolve the debt, the creditor can usually move to the state process for an exemption certificate; once the relevant statutory bar is lifted, ordinary enforcement can resume subject to the state Act, the security documents, other law and any agreement already in force. There is no single mandatory national enforcement order: the creditor may choose the route available against the borrower, land, company assets or guarantors.
| Possible next step | What it means | What the farmer should check immediately |
|---|---|---|
| Exemption certificate | The FDM statutory bar can be lifted for the covered farm mortgage once the state conditions are satisfied | Issue date, duration, review rights, the farm debt/security it specifies and any state-specific exception |
| Default or statutory mortgage notices | The creditor may issue or rely on notices required before exercising mortgage rights | Service date, cure period, amount demanded and whether FDM or another dispute process still restricts the next step |
| Receiver or receiver and manager | A secured creditor may appoint a receiver over a corporate borrower or secured assets where the documents and law permit | The appointment power, secured property, certificate position and urgent legal options |
| Possession or mortgagee sale | The creditor may enforce the land mortgage once entitled to do so | Which titles are secured, valuation/sale process, notices and whether an orderly sale or refinance can still complete first |
| Guarantor or family-home enforcement | A separate guarantee and mortgage can expose a family member's assets | The exact guarantee, cap, home mortgage, demand and whether the guarantor has independent complaint or review rights |
| Statutory demand and winding-up path | A corporate farming borrower can face company insolvency steps in addition to secured enforcement | The service date and immediate legal deadline; use specialist insolvency advice rather than waiting for the farm process |
| Bankruptcy notice and creditor petition path | An individual farmer can face personal insolvency steps where the statutory requirements are met | The judgment debt, service and current statutory requirements and deadlines |
| Internal review, bank IDR or AFCA complaint | These can challenge a decision or change the recovery timetable where the particular pathway is available | Jurisdiction, filing deadline, whether a stay or AFCA recovery restriction applies and what still accrues while the dispute is open |
Worked scenario: the lump sum with a date on it
A cropping enterprise signs an agreement requiring a lump sum by a fixed date. For a refinance to land, the rural valuation must support the required amount, the security and guarantor releases must work, the outgoing bank must produce a payout and discharge, the incoming lender must approve the file and the solicitors must complete settlement. If those steps cannot fit inside the agreed date, the problem is the timetable even if a lender is otherwise willing.
Where the farming entity is a company, company insolvency steps can run alongside secured enforcement. Where the farmer is an individual, personal insolvency steps may also become relevant. This guide does not reproduce those regimes: use the dedicated statutory demand guide, winding-up guide and independent insolvency/legal advice for the actual deadline.
Can AFCA change the enforcement timetable?
Potentially, if the complaint is within AFCA's jurisdiction. AFCA's current public rules say that during an eligible complaint the financial firm must not begin legal proceedings relating to the complaint, pursue earlier debt-recovery proceedings beyond the minimum needed to preserve rights, recover the disputed debt, protect assets securing that debt, assign the recovery right or list a default. AFCA can consent to certain action on conditions, and the financial firm can continue charging interest.
The 2025 Banking Code adds a farm-specific pathway for subscribing banks: before entering farm debt mediation the bank tells the farmer they may have a right to complain to AFCA, and if mediation ends without agreement and a later complaint would otherwise be excluded because the matter was already mediated, the bank consents to AFCA considering it.
AFCA eligibility still matters. Its current small-business information excludes a small-business credit facility above $6,317,000 for complaints lodged from 1 January 2024, while published compensation caps are separate: the current cap for a primary-producer loan is $2,526,500, and a guarantor who has offered their home as security has an unlimited compensation cap. Those figures do not mean every complaint within the dollar amount is eligible; check borrower or guarantor status, facility structure, complaint type and the current Rules.
AFCA is dispute resolution, not a refinance strategy. If an eligible complaint temporarily changes the recovery timetable, use that time to resolve the underlying problem: a viable restructure, a funded refinance, a documented sale or a legal challenge that can actually succeed.
What protections does a farmer have during farm debt mediation?
Farmer-side prohibition or suspension certificates can stop enforcement for up to six months in certain circumstances, while creditor exemption certificates commonly create a three-year enforcement window, with important state-specific exceptions. The clock starts and ends differently depending on the state and the reason the certificate was issued.
| Protection | Where it comes from | When the clock starts | How long it lasts | What it does not do |
|---|---|---|---|---|
| Prohibition certificate, NSW | Farm Debt Mediation Act 1994 (NSW), s 12 | The day the certificate is issued | 6 months | Reduce the debt or stop interest running |
| Prohibition certificate, Victoria | Farm Debt Mediation Act 2011 (Vic) | The certificate is issued after the statutory conditions are met | Up to 6 months, ending earlier when the farmer and creditor enter mediation | Does not reduce the debt or force the creditor to agree to a restructure |
| Prohibition certificate, Tasmania | Farm Debt Mediation Act 2024 (Tas), s 21 | The day the certificate is issued | 6 months | Compel the creditor to agree to anything |
| Prohibition certificate, South Australia | Farm Debt Mediation Act 2018 (SA), s 13(4) | The day the certificate is issued | 6 months, or when mediation starts, whichever is earlier | Survive the start of mediation |
| Enforcement action suspension certificate, Queensland | Farm Business Debt Mediation Act 2017 (Qld), ss 40 and 47 | The mortgagee's refusal notice, or 15 business days after the farmer's request if the mortgagee stayed silent | 6 months, ending earlier on a satisfactory mediation | Apply unless the mortgagee has failed to mediate |
| Cooling off after a mediation agreement | NSW s 18L, Tasmania s 36(2)(a) | The day the mediation agreement is entered into | Until 5pm on the 10th business day | Undo enforcement already taken |
| Internal review of an exemption certificate, NSW | NSW Rural Assistance Authority, approved form under s 18P | The day the applicant is notified of the decision | Apply within 20 business days, and the decision is stayed until the review is decided | Revoke the certificate, a stay is not a revocation |
Queensland is the instructive case. Its farmer-side instrument is not called a prohibition certificate and the farmer applies for it, not the creditor. Under the Queensland Act the farmer may apply for an enforcement action suspension certificate where the farmer is in default, has given a request for mediation notice, and the mortgagee has failed to mediate. Its six months then runs from the mortgagee's refusal, or from 15 business days after the farmer's request if the mortgagee simply went quiet. Same headline number as New South Wales and Tasmania, materially different clock.
A second set of protections comes from the banking industry code rather than from any Act, and applies only to subscribing banks. They are easy to miss because no state administrator publishes them.
| Protection | Where it comes from | What it gives you | What it does not do |
|---|---|---|---|
| No default interest in drought or natural disaster | 2025 Banking Code of Practice, paragraph 128 | No default interest while the land used for the farming operation is in drought or subject to natural disaster | Apply to a lender that does not subscribe to the Code |
| Told about the complaints authority before mediation | 2025 Banking Code of Practice, paragraph 130 | Notice that you may have a right to complain, given before the bank enters mediation | Decide any complaint |
| Bank consent to a complaint after a failed mediation | 2025 Banking Code of Practice, paragraph 131 | The bank's consent for the complaint to be considered where no agreement was reached | Lift the authority's monetary limits |
| Recovery action suspended while a complaint is open | External complaints authority Rules, rule A.7.1 | The firm must not begin proceedings, pursue existing recovery proceedings beyond preserving its rights, recover the debt, protect the securing assets, assign the debt, or list a default | Stop interest, reduce the debt, or bind the authority, which can consent to action on conditions |
| Reasonable steps to meet a prospective guarantor | 2025 Banking Code of Practice, in force 28 February 2025 | An obligation on a subscribing bank to take reasonable steps to meet a prospective guarantor before the guarantee is given | Undo a guarantee already signed years ago |
| Higher compensation cap for a primary producer | External complaints authority published caps, from 1 January 2024 | $2,526,500 on a primary producer loan against $1,263,500 on a general small business loan | Extend to a facility exceeding $6,317,000, which is outside the authority's jurisdiction |
If a subscribing bank is charging default interest on a qualifying farm loan while the land used for the farming operation is in drought or subject to natural disaster, raise the Banking Code rule with the bank and ask for the position in writing. Paragraph 129 says the farmer may need to tell the bank and requires a refund of default interest or fees charged in lieu during the qualifying period.
AFCA publishes a higher compensation cap for a primary-producer loan than for a general small-business loan, but the cap is not the same thing as jurisdiction. The $6,317,000 credit-facility exclusion, employee definition and other Rules still need to be checked first.
You can ask for the exemption certificate to be reviewed
In New South Wales a farmer or guarantor, or the creditor, may apply for internal review of a decision to grant an exemption certificate, and the application operates to stay the decision until the applicant is notified of the reviewer's decision. The window is 20 business days after being notified, or longer if the authority allows, and it runs on the authority's own approved review form.
A stay is not a revocation and does not decide the merits of the debt. Where a certificate is compressing the timetable, a timely review application can nevertheless be important because it changes whether the decision can operate while the review is being decided.
Why do the consumer protections you expect not apply to a farm loan?
Because a farm business loan is commercial credit, and most of the protections farmers have heard of were written for consumer credit. That single boundary explains more surprises on a distressed farm file than any provision of the mediation Acts.
Credit taken out for a business purpose sits outside the consumer credit regime. The privacy regulator puts the reporting side of it plainly: the requirements under credit reporting law generally apply only to the consumer credit information on your report, not to commercial credit information, which is handled under the Australian Privacy Principles instead. The same logic runs through hardship, default notices and responsible lending.
| What people assume protects them | Where it really comes from | Does it apply to a farm business facility |
|---|---|---|
| Consumer default listing rules | Credit reporting law, consumer credit information only | Generally no, commercial credit information is handled under the Australian Privacy Principles |
| Mediation before enforcement | The state Farm Debt Mediation Act | Yes, in the five states with a scheme, where the debt and the security meet that Act's definitions |
| No default interest in drought | 2025 Banking Code of Practice | Yes, but only where the lender subscribes to the Code |
| An external complaint and a suspension of recovery | The external complaints authority's Rules and jurisdiction | Yes, within its small business and primary producer limits |
| Protection for a personal guarantee | The guarantee document, the Code where the lender subscribes, and general law | Depends entirely on the document, which is why it has to be read |
Two things follow on a mediated file. Your protections come from three different places, not one, and each has to be claimed separately. And the lender's obligations may be weaker than you assume in exactly the areas where they matter most, which is a reason to use the mediation Acts rather than treat them as a formality.
If part of the exposure is genuinely consumer credit, for example a home loan on a house in town, that leg may be treated differently again, so the security package needs to be mapped facility by facility.
What if you are the guarantor, the spouse or the adult child?
The farm debt can reach beyond the farmer to guarantors, spouses, corporate trustees and the next generation, so map every borrower, title, guarantee and family asset before anyone signs an outcome. New South Wales and Tasmania expressly extend their farm-mortgage definitions to obligations owed by the farmer as guarantor, and other states have their own coverage rules.
The three positions that come up most often each have a different question attached.
- The guarantor. What exactly does the guarantee secure, is it capped, and does it reach a property that has nothing to do with the farming operation. That is a question for a solicitor with the document in front of them, not a question a broker can answer from a summary. The 2025 Banking Code of Practice added an obligation on subscribing banks to take reasonable steps to meet a prospective guarantor, which is worth checking against how the guarantee in your file was actually taken.
- The spouse or partner. Whether you are on the title, on the loan, on the guarantee, or on none of them, and whether you have been served with anything in your own right. In New South Wales a guarantor can apply for internal review of an exemption certificate in their own name.
- The adult child or successor. Whether the plan being discussed at mediation is compatible with the succession plan, because an agreement that requires a sale can quietly settle a succession question that was never actually decided by the family.
The pattern worth naming is this. On a mediated file the person under the most pressure is usually the farmer, and the person with the most to lose in absolute terms is often the guarantor, who was not in the room when the facility was written and is frequently not in the room at the mediation either. Fix that before the day. If your own home is security for someone else's farm debt, the first call is a solicitor, and the second is what happens when a guarantee is called.
Farm debt mediation is not one event. It is a sequence that can start with a lender review or formal notice, move through a short response window and a negotiation, and end in a repayment plan, sale, refinance, complaint or enforcement pathway. The strongest move is to identify your stage first, use the free rural financial counselling and state process help early, and test every promised date against the documents, valuation and funding work needed to meet it.
Key takeaway: the notice starts a legal clock, the mediation starts a negotiation, and the signed agreement starts a delivery clock. Treat those as three different problems.Frequently Asked Questions
No. A farm debt mediation notice is not a repossession order. In a state with a statutory scheme, it usually means the creditor is moving toward enforcement and must first give you the chance to mediate. The important part is the response deadline: ignoring the notice can let the creditor apply for the certificate it needs to proceed, and a default already recorded does not change that window.
The usual statutory response window is 20 business days in New South Wales, Queensland and Tasmania, and 21 days from the date the notice was given in Victoria and South Australia. Use the deadline printed on your own notice and respond in writing, on the approved form for your state. Do not rely on a general article, or on farm and rural finance basics, if your notice gives a specific date.
Yes. You can investigate refinancing before or during mediation, and testing the funding timetable early is often useful. But a refinance enquiry does not replace the need to respond to the mediation notice, and you should not agree to a payout date until valuation, security, credit and legal steps have been tested against that date.
It can only happen by agreement; the mediator cannot order a write-off and the creditor is not obliged to forgive or reduce the debt. Mediation can instead produce more time, a repayment arrangement, a refinance, a partial asset sale or another negotiated exit. Any signed outcome should be reviewed for its legal and tax consequences.
The mediator cannot force a sale and cannot impose an outcome. A partial sale can become a term of an agreement if you and the creditor agree to it, and the date, title release and payout amount then need to be realistic. If enforcement later becomes available, the creditor's rights come from the registered mortgage, the certificate and the general law rather than from the mediator.
No. Mediation and farmer-side enforcement certificates generally do not reduce the debt or stop ordinary interest from running. Under the 2025 Banking Code of Practice, a subscribing bank has a separate default-interest rule for qualifying farm loans during drought or natural disaster, subject to the Code's conditions.
An eligible AFCA complaint can materially restrict debt recovery while AFCA is dealing with it: the firm's legal-proceedings and recovery actions are limited by the AFCA Rules, although AFCA can consent to certain action and interest can keep running. Eligibility matters. AFCA currently excludes a small-business credit facility above $6,317,000 for complaints lodged from 1 January 2024, and other jurisdiction rules still apply. Treat AFCA as dispute resolution and time to solve the underlying problem, not as a permanent stay or an exit.
The mediation itself is a negotiation process, not the same thing as a credit default listing. The underlying loan conduct, guarantees and any consumer-credit components are separate questions, and commercial credit information is treated differently from consumer credit reporting.
In almost every case where a statutory scheme applies, yes. Attending costs little, the mediator cannot impose an outcome on you, and nothing has to be signed on the day. Refusing or ignoring the invitation is what carries the real cost, because it gives the creditor a ground to seek the certificate it needs to enforce. If the farm is already in default, mediation is the cheapest negotiation available to you.
Less than most farmers expect, because the mediator's fee is either subsidised or split. South Australia publishes a subsidised cost of $195 per party, per day. Victoria subsidises the cost without publishing a rate. In New South Wales the parties share the mediator's costs unless they agree otherwise, and in Queensland each party pays its own costs and half the mediator's fee. Your solicitor and accountant are the larger expense, so budget for them alongside farm and rural finance basics.
No. Farm debt mediation is state law and five states have an Act: New South Wales, Victoria, Queensland, South Australia and Tasmania. The 2019 Royal Commission recommended a national scheme, and the Commonwealth has consulted the states on a harmonised approach, but no national Act exists and Western Australia, the Northern Territory and the Australian Capital Territory have each indicated they will not implement mandatory mediation. The rules that bind your creditor are the rules of the state your secured land sits in.
State law, in Australia. This trips people up because Canada has a federal Farm Debt Mediation Act with its own notice period and stay of proceedings, and several United States states run farmer-lender mediation programs on different rules again. None of that applies to an Australian farm. If a page mentions a fifteen business day notice, a thirty day stay or a ninety day period, it is describing another country and not the scheme that governs your mortgage.
Yes. Tasmania has had a statutory scheme since the Farm Debt Mediation Act 2024, which received Royal Assent on 2 October 2024 and commenced on 4 December 2024, creating the office of Farm Debt Mediation Commissioner. The Act follows the New South Wales model, so a creditor needs an exemption certificate before enforcing and the farmer has 20 business days to respond. Much published guidance still lists only four states, so check the Act before assuming the security position is unprotected.
Not responding inside the window is itself a ground for the creditor to seek an exemption certificate, which lifts the statutory bar on enforcement. Nothing dramatic happens on the day the window closes, which is exactly why the deadline gets missed. The windows are 20 business days in New South Wales, Queensland and Tasmania, and 21 days from the day the notice was given in Victoria and South Australia. Agreeing in writing preserves the protection even if you are not ready to refinance or negotiate yet.
Yes. Farmer-initiated mediation exists alongside creditor-initiated mediation, and in New South Wales the authority states that farmers may initiate under the Act whether or not they are in default on a secured farm debt. The same guidance notes that farming families may find mediation useful for business or succession planning disputes, not only for arrears. Asking early is the one point in the process where you control the timing, so raise it before a default event exists.
A bank cannot stop you refinancing, but it can make the timetable impossible. The payout figure, the discharge of its mortgage and any consent it has to give are all in its hands, and each takes time. Where an exemption certificate is already in force the window can be shorter than a valuation and a credit decision realistically take. That is why files under time pressure often go to a private funder first and back to a mainstream lender later.
A signed mediation agreement or heads of agreement can create binding obligations, and a missed payment, sale or refinance date can reopen enforcement risk. The exact consequence depends on the agreement, the state Act and any exemption certificate in force. Treat a missed milestone the way you would treat a covenant breach and get advice before the date, because fixing it beforehand is easier than undoing it afterwards.
Treat the family home and the farm as one security problem until a solicitor has mapped the documents. A spouse or other guarantor may have separate rights and exposures, and the person whose home is at risk should have their own legal advice before any mediation agreement changes the debt or security position. If a demand has already landed, read what happens when a guarantee is called.
Yes, potentially. If the borrower is a company, the security documents give the lender that right, and no farm debt mediation bar or other restriction prevents it, receivership can be one of the enforcement paths. Whether that power exists and when it can be used depends on the security documents, the state mediation position and corporations law, which is why anything that buys time, including a short term funding option, is worth pricing early.
No. Western Australia has no statutory farm debt mediation Act equivalent to the five legislated states. Its dedicated DPIRD scheme page says the voluntary 2024 to 2026 scheme ended on 30 June 2026 and is Closed, while a broader DPIRD and RBDC page still lists it under open schemes, so confirm availability directly rather than relying on either page. Whatever voluntary service exists, it does not create the statutory certificate bar, so treat the position the way any other property secured lending file would be treated.
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