A one-woman crusade to get banks to go a bit easier on deeply indebted farmers has got as far as the Labour Party caucus which is considering a possible Member's bill.
Rural advocate Jeanette Walker, a former farmer from southern Wairarapa, says there is no genuine process for farmers to resolve any rural debt disputes with their banks at present.
She says banks can just issue a property law notice putting a farm into receivership.
Ms Walker says although the bank's preference is not to issue receivership they have no hesitation in doing so and it can be very quick and brutal with no real mediation taking place.
"To use bank jargon technical defaults are created to condition the farmer to have a courageous conversation going forward, translated means we would like you to voluntarily sell your farm."
Ms Walker says a debt mediation law would give both sides time to step back and more dispassionately consider the situation.
She says it would allow the farmer to have 28 days to start negotiating with the bank and it would limit the bank's ability to issue PLA notices straight away and enforce debt reduction through receivership.
Ms Walker says debt mediation laws are in place in Australia, the United States and Canada and it's time New Zealand had one too.
Labour says it will decide within the next few weeks if it is to go into the ballot for Member's bills.
Federation comment
Although Federated Farmers wholeheartedly supports mediation, it does not support it becoming law.
President Bruce Wills said Reserve Bank data indicates less than 0.5% of farms go into receivership and the benefit of statutory intervention with such a small number is probably not worth its unintended consequences.
He said a remit about debt mediation at the federation's annual meeting last week was passed by a large majority and he has since told several banks the organisation is expecting them to now look closely at voluntarily offering mediation in a difficult dispute.
