Farm debt mediation: how it works in your state and how to walk in with a plan

Farm debt mediation is a meeting your lender usually has to offer before it can enforce a farm mortgage. You, the lender and an independent mediator sit down and try to agree on what happens next. It’s compulsory before enforcement in NSW, Victoria, Queensland, South Australia and, since December 2024, Tasmania. Western Australia runs a voluntary version. Mediation buys you time. Whether you walk out with a deal mostly depends on what you bring into the room.

That’s the part most explainers skip. Here’s how the schemes work, the deadlines that trip people up, and how to turn the mediation window into a refinance, a part-sale or a restructure the lender can actually say yes to.

What is farm debt mediation, in plain terms?

Think of it as a compulsory pause with a referee. Before a bank or other creditor can take possession of farmland, appoint a receiver or sell, the law in most states says it must invite you to mediate. A neutral mediator, usually someone with rural and finance experience, runs the session. They don’t take sides and they can’t order anyone to do anything.

If you reach agreement, it gets written down and becomes binding. That might be new repayment terms, an interest-only period, a deadline to refinance elsewhere, or a timetable to sell part of the property. If you don’t agree, the lender can generally go to the state body for a certificate that lets it enforce.

Mediation won’t wipe the debt, and it won’t make the bank lend you more. What it does is force a proper conversation, with time attached, at the moment you need it most.

How does farm debt mediation work in each state?

The schemes share a shape but differ in the detail, and the deadlines are where people come unstuck.

State	Law and who runs it	Your reply window	Worth knowing
New South Wales	Farm Debt Mediation Act 1994, NSW Rural Assistance Authority	20 business days	Farmers can start mediation themselves, in default or not
Victoria	Farm Debt Mediation Act 2011, Victorian Small Business Commission	21 days from the notice	Since October 2022 lenders need an exemption certificate before enforcing in every case, and it lasts three years for farm mortgages
Queensland	Farm Business Debt Mediation Act 2017, QRIDA	20 business days	You nominate three mediators from QRIDA’s register and can request the lender’s documents
South Australia	Farm Debt Mediation Act 2018, Small Business Commission	21 days	You can ask for mediation to happen within three months of the notice
Tasmania	Farm Debt Mediation Act 2024, Department of State Growth	20 business days	Commenced 4 December 2024; mediation should occur within three months unless agreed otherwise
Western Australia	Voluntary scheme, RBDC and DPIRD, mediated by the SBDC	Other party has up to 20 business days	You must show you’ve tried to sort it out with the lender first

Sources: the NSW Rural Assistance Authority, the Victorian Small Business Commission, QRIDA’s mediation information package, the Tasmanian Farm Debt Mediation Act 2024 and WA’s DPIRD. The Northern Territory and the ACT don’t have a farm debt mediation law of their own, so borrowers there rely on the lender’s hardship process and general dispute schemes.

Farm debt mediation in NSW

The lender has to invite you to mediate in writing before enforcing. You’ve got 20 business days to respond. The RAA also lets farmers start mediation themselves, which is handy if you can see trouble coming a season ahead.

Farm debt mediation in Victoria

Victoria tightened its scheme in 2022. Lenders now need an exemption certificate from the VSBC before enforcing, even when the farmer simply didn’t reply. The VSBC can refuse one if it’s satisfied you had good reason not to mediate and intend to do so soon. Once issued, though, the certificate lasts three years for farm mortgages.

Farm business debt mediation in Queensland

Queensland’s process is the most paper-heavy. When you request mediation you nominate three mediators in order of preference and can ask for copies of loan documents. If the lender agrees and asked you for documents, you have 30 business days to hand them over. Any Heads of Agreement you sign comes with a 10 business day cooling-off period.

Can a bank sell my farm without mediation?

In the five legislated states, generally not. The lender needs either a completed mediation or an exemption certificate first. If it refuses to mediate while you’re in default, you can apply to have enforcement put on hold. Tasmania calls this a prohibition certificate, lasting up to six months, and Queensland calls it an Enforcement Action Suspension Certificate.

The trap is silence. If you don’t reply to the notice, or reply late, the lender can apply for an exemption certificate. In Tasmania and Victoria that switches off the Act’s protection for that debt for three years. So reply in writing inside the window even if your figures aren’t ready. You can keep preparing after you’ve said yes.

If things have already moved to a formal sale process, our page on stopping a mortgagee sale covers the urgent options.

How to prepare for farm debt mediation (the bit that decides the outcome)

The lender will arrive with a file, a valuation and someone authorised to settle. You should too. QRIDA’s guidance specifically suggests a position statement, cash flows and an action plan. Free rural financial counsellors (1300 771 741) can help build them. Here’s the order we’d work in.

1. Reply to the notice and lock in the date. Write down the deadline the day the letter lands.
2. Map every debt on one page. List each lender, balance, limit, repayment, security and guarantee. Include stock agent accounts, machinery finance and family loans.
3. Build an honest 12 to 24-month budget. Show the season you’ve actually got, not the one you hope for. Lenders and mediators spot wishful yields quickly.
4. Get a realistic view of value. Your lender’s last valuation may be stale in either direction. Our guide on what lenders look for in farm valuations explains what moves the number.
5. Line up the alternative before the meeting. This is the step that gets skipped. A lender that hears “we’ll try to refinance” gives you little. A lender shown a credible refinance path, with a lender assessing the file and a timeline, gives you room.
6. Decide your walk-away point. Know in advance whether you’d accept selling a parcel, the house block or surplus plant, and what you won’t give up.
7. Bring advisers who can speak to the numbers. In Queensland everyone attending must be approved by the mediator. Anyone representing a party needs written authority to sign.

If you’re up against a deadline right now, tell us where the farm stands and we’ll look at which alternatives are realistic before your mediation date.

What refinance options can be on the table?

This is where a broker who knows rural lending earns their keep. Depending on equity, the property and the cause of the strain, the options we most often explore are:

• A full refinance to another lender. That might be a different bank, a specialist agribusiness lender or a non-bank, set up so you can live with the repayments. See farm debt refinance.
• A restructure that splits the debt. Separate the land debt from seasonal working capital, or add an interest-only period while the business recovers. See farm debt restructure.
• A second mortgage to clear the arrears. A private lender sits behind the existing first mortgage, which can satisfy the bank while the bigger fix is built. See farm second mortgage.
• A bridge to a part-sale. Short-term finance carries you to settlement on a parcel you’ve agreed to sell, rather than accepting a forced sale of the whole place. See farm bridging loans and rural subdivision finance.
• Off-farm income doing more work. A partner’s wage, contracting income or rent from a cottage can support serviceability with lenders that count it.

Private and short-term options can sometimes be possible on a tighter timeframe than a bank refinance. They’re built as a bridge, with a clear exit, not a forever loan.

A worked example (illustrative only)

Picture a mixed cropping and sheep operation in western Victoria after two dry years. The bank’s seasonal line is maxed out, two quarterly repayments have been missed, and a mediation notice arrives in late winter. The owners reply within the 21 days and call a rural financial counsellor, who helps rebuild the budget. They talk to a broker the same week.

The broker finds enough equity for a refinance, but not quickly enough to beat the bank’s timetable. So the plan taken to mediation has two parts. A private second mortgage clears the arrears and buys six months. Meanwhile a 40-hectare block on a separate title goes to market, and the proceeds pay down the seasonal debt so a longer-term lender can take out the whole facility. The bank agrees to a written timetable instead of enforcing. Every real case differs, but the pattern holds: the plan, not the meeting, did the heavy lifting.

What mistakes cost farmers the most in mediation?

• Missing the reply deadline. It’s the single most expensive error, and it can hand the lender an exemption certificate.
• Arriving with no alternative. If the only proposal is “give us more time”, expect a short meeting.
• Signing a Heads of Agreement you can’t fund. If the deal depends on a refinance, check the finance is genuinely achievable before you sign. Use any cooling-off period to do it.
• Applying to lenders everywhere at once. A burst of credit enquiries looks like desperation and can narrow your options. One coordinated approach works better.
• Leaving guarantors and family out of the loop. If a partner, parent or second entity has to sign, brief them early.

For the bigger picture on keeping the farm funded through a tough stretch, our guides on refinancing farm debt step by step and drought and farm cash flow go deeper. So does help for farms in arrears.

Need farm refinance before your mediation date?

Sounds like you need finance that can take out or restructure farm debt while the clock is ticking. That’s exactly the work Trevor and the team do. Rural refinancing, private second mortgages and bridging finance for farmers whose bank has run out of patience are bread and butter here. We’ll tell you honestly what looks achievable before your mediation, and what doesn’t.

The enquiry takes about a minute, and there’s no credit check when you first enquire, so simply asking won’t leave a mark on your credit file. Your details stay with us. They aren’t fired off to a pile of lenders, so your phone won’t start ringing hot. A real person reads your situation and calls you back to talk it through. Please fill the form in accurately, including the mediation date and who your current lender is, so we can match the right option first time.

Check your farm refinance options →