01
The actual financial position
Current facilities, balances, arrears, other creditors and the real cash position. Understating it helps nobody, because the creditor already knows most of it and the mediation works on what is true.
Guide
A statutory step before anything is enforced.
New Zealand law requires a lender to offer mediation before taking enforcement action against farm property. It is a real protection with a defined process, and a great many farming businesses do not know it exists.
MS
Matt Stiles Editor
Published 8 September 2026 Last reviewed 8 September 2026 Read time 12 min
The short version
Five lines about the scheme.
- It is a statutory requirement. A creditor must offer mediation before taking enforcement action against farm property under a farm debt, under the Farm Debt Mediation Act 2019.
- It is administered by the Ministry for Primary Industries. Which approves mediators and organisations and publishes the process and the forms.
- A farmer can also request it. The scheme allows a farming business to seek mediation rather than waiting for a creditor to offer it, which is the part fewest people know.
- It is a conversation, not a determination. A mediator helps the parties reach an agreement. They do not impose one, and the outcome is whatever the parties agree.
- Indicative only. This is general information, not legal advice. The Act and the Ministry are the authoritative sources and a solicitor should be involved.
What it is
A structured conversation, required by statute.
Mediation under the scheme brings the farming business and the creditor together with an independent mediator approved for the purpose. The mediator’s role is to help the parties reach their own agreement rather than to decide anything, which is what distinguishes it from an adjudication or a court process.
The outcomes vary because the situations do. A restructured facility, a repayment arrangement, a period of forbearance, an agreed sale on the farmer’s own timetable, or an orderly wind-down are all things parties have agreed through mediation, and each is a better outcome than an enforced sale for almost everyone.
Where no agreement is reached, the process concludes and the creditor may proceed as the Act allows. Even then, mediation has ordinarily clarified the position for both sides, which is worth something on its own.
Who attends
The farmer and the creditor
Who runs it
An approved mediator
What they do
Facilitate, not decide
What comes out
What the parties agree
How it runs
Four stages of a mediation.
01
The offer or the request
A creditor intending to enforce against farm property must offer mediation. A farming business may also request it, which does not require the creditor to have taken any step first. Either route starts the same process, and the forms and requirements are published by the Ministry for Primary Industries.
02
Appointing a mediator
Mediators are approved for the scheme and the parties agree on one, or one is appointed under the process. They are independent of both the farmer and the creditor and their role is facilitation rather than judgement.
03
Preparing
Both parties bring their position: the financial situation, what has been proposed, what is possible and what each needs. A farming business that arrives with its own figures, a budget and a proposal is in a considerably stronger position than one that arrives to hear what the creditor wants.
04
The mediation and the outcome
The parties meet with the mediator and work toward an agreement. Where one is reached it is documented. Where none is, the process concludes and the position is what the Act provides. Advisers can attend, and having an accountant and a solicitor involved is ordinary rather than adversarial.
The part fewest people know
A farming business can request mediation itself.
The scheme is usually described as an obligation on creditors, and it also allows a farming business to seek mediation rather than waiting to be offered it. That matters because it converts a passive protection into an active option: a business that can see difficulty ahead can bring the conversation forward on its own terms rather than waiting for enforcement to be contemplated. The Ministry for Primary Industries publishes how to do it, and a solicitor or a rural support organisation can help with the step.
Preparing for it
Four things worth having ready.
A farming business that arrives prepared is in a considerably better position than one that arrives to listen, and none of this requires anything the business does not already have.
02
A budget for the coming season
Built on conservative production and prices. It is the basis for any proposal about what the business can service, and without it a proposal is an assertion.
03
A proposal
What the business is asking for, whether that is restructured terms, a period of forbearance or an agreed timetable for a sale. Arriving with a proposal changes the meeting from a hearing into a negotiation.
04
Advisers
An accountant and a solicitor, and where appropriate someone from a rural support organisation. Having them involved is ordinary rather than confrontational, and their presence frequently improves the outcome.
What it is not
Three misunderstandings worth clearing.
It is not a court and the mediator does not decide anything. Nobody rules on who is right, no order is made, and the outcome is only what the parties themselves agree. That is what makes it useful, because it removes the adversarial framing that makes these conversations harder.
It is not an admission of failure. Mediation is a statutory process that exists precisely because farming difficulty is frequently seasonal and frequently recoverable, and using it is a sensible commercial step rather than a last resort. Lenders participate in it routinely.
It is also not the end of the road. A great many mediations produce a restructured arrangement and a business that continues, and even where the outcome is a sale, an agreed sale on a sensible timetable is a materially better result than an enforced one.
Before it gets there
The conversation that avoids the mediation.
Almost everything on this site returns to the same point, and it applies here more than anywhere. A farming business that raises difficulty early has options a business that raises it late does not, and rural lenders deal with seasonal difficulty constantly.
A payout revision, a drought, a lost vintage or a failed crop are all events a lender can see coming and can work with. What is difficult is a business that stops communicating, misses reporting, and appears at the review with a position nobody was told about.
Mediation exists for the situations where that has already happened or where the difficulty is genuinely beyond a conversation, and it is a real protection when it is needed. The better outcome is still the phone call in October, and it costs nothing.
Where to get help
Who to contact, and it is not only a lawyer.
The Ministry for Primary Industries administers the scheme and publishes the process, the forms and the list of approved mediators. That is the starting point for anyone wanting to understand what applies.
Rural support organisations exist in every region of New Zealand and provide free, confidential help to farming businesses under financial or personal pressure. They are staffed by people who know the sector and they are used to exactly these situations. Contacting them is free and it does not commit a business to anything.
A solicitor and an accountant should be involved in any mediation, and a business worried about the cost of that should say so rather than going without. There are more sources of help than most farming businesses realise, and the ones that exist are used by people who look very much like them.
Method
How this guide was written, and its limits.
This guide describes the scheme in general terms and deliberately does not reproduce the statutory requirements, the timeframes, the notice provisions or the circumstances in which mediation is or is not required. Those are set out precisely in the Farm Debt Mediation Act 2019 and by the Ministry for Primary Industries, and paraphrasing them on a website risks stating a requirement inaccurately in a context where a farming business may be relying on it.
Both are linked in the sources and both are the authoritative position. Where a specific situation is in question, the Act, the Ministry and a solicitor are the correct places to go.
Nothing here is legal advice. This site is not a law firm and cannot see the facts of any particular situation, and a farming business facing enforcement should have a solicitor.
Before the mediation
Four things worth doing in the weeks beforehand.
A farming business that arrives prepared is in a materially better position, and none of this requires anything the business does not already have.
01
Get the numbers straight
Every facility, every balance, every arrears position and every other creditor including stock firms and suppliers. A picture that is incomplete on the day is worse than an uncomfortable one that is complete.
02
Build a realistic season budget
On conservative production and prices, because it is the basis of any proposal about what the business can service. Without it a proposal is an assertion.
03
Decide what outcome is actually wanted
Restructured terms, forbearance for a period, an agreed timetable for a sale, or a wind-down on the business’s own terms. Arriving without a preference means accepting whatever emerges.
04
Line up the advisers
An accountant, a solicitor and, where useful, someone from a rural support organisation. Cost is a fair concern and it is worth raising rather than going without, because there is more help available than most people expect.
The human part
Financial difficulty on a farm is not only financial.
A farm is frequently a home, a family history and an identity as well as a business, and financial pressure on one is pressure on all of them. That is not a sentimental observation; it is the reason rural support organisations exist and are staffed by people who understand the sector rather than only the accounts.
It also affects how these situations develop. Difficulty that would prompt an ordinary business to call its bank can prompt a farming family to say nothing, and the delay makes the position worse in a way nobody intended. Every rural lender and every rural support organisation says the same thing about it.
Contacting a rural support organisation costs nothing, commits the business to nothing and is confidential. They are used by people in exactly this position, they know the mediation process, and the conversation is available well before anything reaches enforcement.
What a creditor is weighing
Why enforcement is rarely a lender’s preferred outcome.
Realising a farm is slow, expensive and public, and it frequently produces less than an orderly sale would. A lender contemplating enforcement is contemplating a process that costs it money, takes a long time and produces a result nobody involved wanted.
That is the reason rural lenders work through difficulty far more often than they enforce, and it is the reason mediation is more likely to produce an agreement than the framing suggests. Both parties are ordinarily better off with almost any structured outcome than with an enforced sale.
Understanding that changes how a farming business should approach the conversation. It is not a plea for leniency from a party that would rather not give it. It is a negotiation between two parties who both have strong reasons to reach an arrangement, and arriving with a proposal is what makes that possible.
Afterwards
What happens once an agreement is reached.
An agreement reached at mediation is documented, and what it contains is whatever the parties agreed: revised terms, a payment schedule, a period of forbearance, a timetable for a sale, or a combination. It is a commercial arrangement rather than a court order.
The obligations in it are real and meeting them matters, because a mediated arrangement that is not honoured leaves the parties where they were with less goodwill. A business agreeing to something it cannot deliver has solved nothing, which is why an honest budget is more useful in the room than an optimistic one.
Where the arrangement works, the business continues and the difficulty becomes a period rather than an ending. That is the ordinary outcome of a mediation that both parties prepared for, and it is worth knowing that it is the ordinary outcome rather than the hoped-for one.
The process
What mediation offers, and what it does not.
What it offers
- A statutory step a creditor must take before enforcing against farm property
- An independent mediator with no interest in either party’s position
- A structured conversation rather than an escalating exchange of letters
- Outcomes ranging from restructured terms to an orderly sale on agreed timing
- A process a farming business can initiate rather than wait for
What it does not
- Impose an outcome, since the mediator does not decide anything
- Guarantee an agreement, because either party may not reach one
- Remove the underlying debt or the obligations attaching to it
- Substitute for legal and accounting advice, which both parties need
- Replace the earlier conversation that would have avoided it
If it is being contemplated
Three steps for a business seeing difficulty ahead.
01
Talk to the lender first
A conversation before anything is missed is a different conversation from one afterwards. Rural lenders deal with seasonal difficulty constantly, and the options available to a business that raised it early are wider than those available to one that did not.
02
Contact a rural support organisation
It is free, confidential and does not commit the business to anything. They know the sector, they know the mediation process, and they are used by people in exactly the same position. The call is available well before anything reaches enforcement.
03
Get the advisers involved
An accountant to build a realistic position and a solicitor to explain what the agreements actually say. Cost is a fair concern and it is worth raising with them rather than going without, because there is more help available than most people expect.
For the people around it
What a neighbour or an adviser can usefully do.
Financial difficulty on a farm is frequently visible to the people nearby before it is discussed, and the ordinary instinct is to say nothing out of respect. That instinct is understandable and it is not always the most useful response.
What helps is knowing the protections and the support exist and being able to mention them. That mediation must be offered before enforcement, that a farmer can request it, and that rural support organisations are free and confidential are three facts most people do not know, and passing one on costs nothing.
It is also worth knowing that these organisations take calls from people worried about someone else. That is an ordinary way for support to reach a family that would not have made the call itself, and it is used more than most people realise.
The servicing question
What a restructured facility might look like.
A mediation frequently produces a restructured arrangement, and modelling what different terms would cost is useful preparation. Indicative only, and not a quote or offer of credit.
Indicative repayment
Weekly
$1,872/week
$8,111 /month $86,633 total interest
$400,000
$5,000 $500,000
5 years
6 months 5 years
8.00% p.a.
8% (secured) 30% (unsecured)
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
Your $400,000 scenario
5 years at 8.00% . Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
References
Sources
- Farm Debt Mediation Act 2019
The authoritative statement of the scheme, its requirements and the circumstances in which mediation must be offered.
- Ministry for Primary Industries, farm debt mediation
The administering agency, publishing the process, the forms and the list of approved mediators.
- Rural Support Trust
Free and confidential regional support for New Zealand farming businesses under financial or personal pressure.
- New Zealand Law Society
Referenced for the point that a farming business facing enforcement should have a solicitor.
- Reserve Bank of New Zealand, agricultural lending statistics
Context for New Zealand rural debt levels and sector conditions.
FAQ
Questions, answered
What is the Farm Debt Mediation Scheme?
A statutory scheme under the Farm Debt Mediation Act 2019 requiring a creditor to offer mediation to a farming business before taking enforcement action against farm property under a farm debt.
Who administers it?
The Ministry for Primary Industries, which approves mediators and mediation organisations and publishes the process and the forms.
Can a farmer request mediation?
Yes, and it is the part fewest people know. A farming business can seek mediation rather than waiting for a creditor to offer it, which turns a passive protection into an active option.
Does a mediator decide who is right?
No. A mediator facilitates a conversation and helps the parties reach their own agreement. Nothing is imposed, and the outcome is only what the parties themselves agree to.
What outcomes are possible?
A restructured facility, a repayment arrangement, a period of forbearance, an agreed sale on a sensible timetable, or an orderly wind-down. Each is ordinarily a better result than an enforced sale.
What happens if no agreement is reached?
The process concludes and the creditor may proceed as the Act allows. Even then the position has ordinarily been clarified for both sides, which has some value on its own.
How should a farming business prepare?
With the actual financial position, a budget for the coming season built on conservative assumptions, a specific proposal, and advisers. Arriving with a proposal changes the meeting from a hearing into a negotiation.
Should a solicitor be involved?
Yes. A farming business facing enforcement should have a solicitor, and an accountant as well. Their presence is ordinary rather than confrontational and it frequently improves the outcome.
Is using the scheme a sign of failure?
No. It exists because farming difficulty is frequently seasonal and recoverable, lenders participate in it routinely, and using it is a sensible commercial step rather than a last resort.
Where else can help be found?
Rural support organisations operate in every region of New Zealand and provide free, confidential help to farming businesses under financial or personal pressure. Contacting them costs nothing and commits the business to nothing.
What is better than mediation?
An early conversation with the lender. A business that raises difficulty in October has options one that raises it in March does not, and rural lenders deal with seasonal difficulty constantly.
Is this guide legal advice?
No. It describes the scheme in general terms and does not reproduce the statutory requirements, which are set out precisely in the Act and by the Ministry for Primary Industries. A solicitor should be involved in any particular situation.
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