Farm mediation is a process which brings producers and others together to resolve disputes. The process is voluntary and binding only if the parties can reach a mutual agreement.
Mediation is not arbitration or a court of law. It is a process which focuses on developing alternatives for resolving disputes.
The mediator does not decide the issues for the parties but encourages them to reach mutually agreeable solutions.
The Negotiations Program has been very effective in providing borrowers and creditors an alternative means of resolving their financial disputes without litigation or appeals. Historically, over 75 percent of those cases which go through a mediation session are able to reach some sort of agreement. Additionally, many cases were resolved through the negotiation between the parties outside of a formal mediation session. Often, having one party request mediation is enough to get the parties communicating again so they can work out their own solution to the dispute.
For the mediation process to be successful, all parties must be aware of their current situation and the options available to resolve their differences. All parties should bring to the mediation whatever information they feel would be necessary to support their interests.
Either farm borrowers, their creditors, producers, or the federal agency may request mediation. If you have been notified of mediation as part of an adverse decision from a federal agency, they have already agreed to participate. If the producer agrees to participate, they will be contacted to establish a time and place to conduct the mediation session.
If a solution is reached during mediation, a tentative agreement is prepared. All parties will sign the agreement and will receive a copy. No agreement becomes final until everyone has had the opportunity to have the document reviewed. The final agreement may be enforced as a legal contract between the parties.
Each party participating in mediation will be charged $20 per hour for the time spent in the mediation session. The fee has been set to cover a portion of the cost associated with the program and is not intended to exclude anyone from the mediation process. In cases of extreme financial hardship, the fee may be waived in whole or in part.
The program has been designed for quick resolution of disputes. The initial mediation session will be conducted within 40 days of receiving a mediation request. The entire process cannot extend for more than 60 days without consent of all parties.
Disputes concerning ag credit issues may be requested at any time. Often it is requested after an ag creditor advises that a loan or an account is delinquent. An ag creditor may be a lending institution, ag supplier, co-op, implement dealer, veterinarian etc.
Mediation is available as part of USDA programs informal appeal process. USDA will notify you of your right to mediation whenever an adverse decision has been made in regards to your participation in one of their programs. Mediation must be requested within certain time limits stated in the written notice provided by USDA.
Mediation offers several advantages over other remedies in resolving disputes. The process:
Participation in mediation does not constitute a waiver of any legal rights. If no solution is reached, the parties are free to proceed with the appeal or other legal remedies
Mediation involves much more than just the session itself. While the overall goal of the program is to get the parties to the table to negotiate an agreement, that is just the last step to the process. Before that can happen, it is essential that all the parties are prepared for the process. The Negotiations Program offers services in the form of clinics and financial counseling as part of the mediation program to insure that the parties find the mediation process successful.
Mediation clinics are held monthly in various locations across Nebraska. These free one-on-one educational consultations provide information for producers on farm finances; the laws, regulations and policies governing FSA; debt restructuring and other legal options; and how the mediation program fits into this process. The clinics are successful in providing this needed information to producers and in acquainting them with mediation. Clinic staff are available to answer any specific legal, financial, tax, or mediation question in a confidential setting. To access the clinic schedule visit here. To register for a clinic, call 800-464-0258.
Borrowers who apply for mediation may be offered a free individual financial analysis of their current situation. One of our experienced financial counselors will come to your farm and help you develop, a cash flow analysis, balance sheet and a five year trend to help analyze where you are, and how you got there. Financial counseling is a valuable tool to assess your current situation and discover options in preparation for mediation.