Farm debt mediation backlog of five months confirmed by Small Business Commission

It was intended to streamline the farm debt dispute process. But a bureaucratic backlog is now choking the system. Here’s why.

Embattled farmers are being left in a five-month cashflow limbo due to cutbacks to Victoria’s farm debt mediation service, with its operators warning of significant delays.

Operated by the Victorian Small Business Commissioner, the commission website now cautions users that it is “experiencing delays in responding to the high volume of inquiries and applications for our help.”

“Please know that we are working as quickly as we can to respond and that could take up to 20 weeks,” the website warning reads.

Victorian Farmers Federation president Brett Hosking said primary producers under financial strain deserved a speedy resolution to debt matters.

“Farmers have to plan their businesses a long way ahead of time, so issues of debt negotiation and resolution can’t be put on the back burner. Especially if it’s a matter of months and months,” he said.

The Weekly Times directed a series of questions on farm debt mediation to Attorney-General Sonya Kilkenny, whose office then redirected questions to Small Business Minister Natalie Suleyman.

A spokesman for Ms Suleyman did not answer questions about the delays.

“The Victorian Small Business Commission provides high quality, low-cost dispute resolution services for farmers and small business owners in Victoria,” the spokesman said.

“The VSBC continues to achieve high overall satisfaction rate for its services and is focused on providing a high-quality service and resolving as many disputes as possible either before or during mediation.”

In December, The Weekly Times revealed the Allan Government cut the commission’s funding from $4.12m in 2022-23 to just $2.79m in 2023-24, forcing it to axe half its staff and inhibiting its ability to run mediation sessions.

The commission’s annual reports show its full-time-equivalent staffing has dropped from 19.6 in 2022-03 to 8.2 in 2023-24.

Victorian Small Business Minister Natalie Suleyman. Photo: David Crosling

Opposition agriculture spokeswoman Emma Kealy said cutbacks to debt mediation services were particularly egregious given they coincided with impending tax rises in the form of the Emergency Services Volunteers Fund and Biosecurity Tax.

“It simply doesn’t make sense to cut farmer debt support at the same time as Labor are introducing new taxes that target farmers,” the Lowan MP said.

“Farm debt mediation works as a great support for farmers and creditors alike.”

While Ms Suleyman’s office did not answer questions on delays, the office did confirm that 26 farm debt mediations were held in the 2018-19 financial year and 24 were successful.

All 26 mediations were held in person with 15 in regional Victoria and 11 in metropolitan Melbourne.

In the 2023-24 financial year, 18 farm debt mediations were held and 17 were successful.

Eleven of the 18 mediations were held in person and seven were held via video conference. Of the in-person mediations, six were held regionally and five were held in metropolitan Melbourne.

Since 2022, only two applications have been made for prohibition certificates and no certificates have been issued.

The Farm Debt Mediation Act 2011 requires farmers and their creditors mediate, or attempt to mediate, farm debt arrears to the satisfaction of the Victorian Small Business Commissioner, before approving exemption certificates.