Victorian Small Business Commissioner Lynda McAlary-Smith is encouraging Victorian farmers experiencing financial hardship to seek support with their situation to plan a way forward, with confidential assistance available.
There was a 23% increase in applications to mediate farm debts in financial year 2024/25, according to the Victorian Small Business Commission's (VSBC) Annual Report, tabled in parliament today.
"Farming families are enduring difficult conditions – from ongoing drought to difficult economic settings and global events impacting market prices. This is reflected in an increase in creditors approaching the VSBC to mediate farm debts in arrears," Commissioner McAlary-Smith said.
As a safeguard for Victorian farmers, the Farm Debt Mediation Act 2011 (the Act) prohibits creditors from taking enforcement action against farmers in arrears on loans for farmland and farming machinery. The Act requires farmers and their creditors to mediate, or attempt to mediate, farm debt arrears to the satisfaction of the Victorian Small Business Commissioner.
91% of farm debt mediations facilitated by the VSBC in financial year 2024/25 were successful.
"Farm debt is complex and challenging as it often involves significant sums of money, the weight of family history and relationships. It can be incredibly emotional and stressful," Commissioner McAlary-Smith said.
Farmers who aren't yet in arrears can choose to seek mediation with their financier about their farm debt as a preventative step. If those farmers then fall into arrears, the creditor must still provide the farmer with the option of a mediation about that farm debt before they can pursue recovery action.
"Farmers can tackle financial challenges before they compound," Commissioner McAlary-Smith said. "Starting the conversation early, and seeking the right assistance, can result in a better outcome in the long-term."
"There's no wrong place to start the conversation either – be it with the VSBC or the Rural Financial Counsellors, we're all here to help."
The Rural Financial Counselling Service can provide free information and assistance on financial matters, including farm debt mediation. They can be reached on 1300 771 741.
The Victorian Small Business Commission can be reached on 1800 878 964 or vsbc.vic.gov.au
Beyond Blue offer a free and confidential mental health coaching service called NASBO by calling 1300 945 301 or by visiting beyondblue.org.au. A 24/7 support line is available on 1300 22 4636.
