The Arkansas Farm Mediation Act By Cami Davis Farm Mediation Coordinator Arkansas Department of Agriculture
The Arkansas Farm Mediation Act (Act) impacts the actions lenders can take on a wide variety of agricultural loans that meet certain criteria. Many lenders are not aware of the Act or the Arkansas Farm Mediation Program (Mediation Program), now being administered by the Arkansas Department of Agriculture under the Transformation and Efficiencies Act of 2019. Agricultural mediation is designed to serve as a confidential and cost-effective way for farmers or producers and their creditors to resolve disputes collaboratively with the guidance of a neutral mediator. Through the Mediation Program, creditors and farmers can avoid the burdensome cost and time required for litigation while achieving mutually beneficial outcomes. The Mediation Program is completely voluntary, confidential, and provided at no cost to participating farmers and creditors. The Mediation Program is governed by Ark. Code Ann. 2-7-101 – 2-7-310. These statutes set forth the requirements that must be met prior to a lender taking action against a qualifying loan that is delinquent, distressed, or subject to a monetary or other default. A loan qualifies for the Mediation Program if it is a secured debt with a balance of at least $20,000. The farmer must own or lease at least fifty acres of agricultural property or have generated gross sales of farm products totaling at least $20,000 in any of the three preceding years. If these conditions are met, the creditor, prior to initiating legal action against the farmer, is required to send a one-page form called the “Creditor Notice to Farmer of Right to Request Mediation” (often referred to as a “Creditor Notice”) by certified mail to the farmer. This form can be found on the “Services” section of the Arkansas Department of Agriculture’s website. After a creditor sends a completed Creditor Notice to a farmer, a copy must be sent to the Mediation Program at the address listed at the bottom of the form. The Mediation Program will create a case file and provide the farmer with an information packet. The packet will include a letter informing the farmer that he or she has fourteen days to request mediation by completing the enclosed forms and returning them to the Mediation Program. A release will be issued to the creditor if a request for mediation is not received from the farmer within the 14-day period.
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The Arkansas Banker n Winter 2019
A creditor will be notified within five days of a farmer’s request for mediation. The Mediation Program staff will arrange for a mediator, venue, and meeting time that works for both the creditor and farmer. All participants will be notified in writing once the mediation is scheduled. If the farmer has additional qualifying creditors, these creditors will be notified of the mediation and will have a right to attend and participate in the process but will not receive a release at the end of the mediation. Additional qualifying creditors may be added to the mediation if the farmer has multiple agricultural loans that are not in good standing. Mediations are also relatively quick. The process generally takes an average of forty-two days after receipt of the farmer’s request for mediation. While the parties’ advocates may attend and participate, both creditor(s) and farmer are required to personally attend the mediation and have the authority to negotiate. The initiating creditor will be issued a Release at the end of the mediation regardless of whether an agreement is reached. The release is good for one year from the date of issue. All mediators on the Mediation Program’s roster are attorneys who are also certified mediators through the Arkansas Alternative Dispute Resolution Commission (ADR) program, a division of the Administrative Offices of the Courts. The ADR have defined qualifications and training that must be completed to become certified, which includes an additional six hours of continuing mediation education each year. The Arkansas Department of Agriculture proudly administers the Mediation Program as an opportunity to support farmers and creditors. Our goal is to promote stability and good financial health for the agricultural industry along with a positive lending environment in Arkansas without the added time, stress, and expense of litigation. To find out more about the Mediation Program, you can contact: Cami Davis, Farm Mediation Coordinator, Arkansas Department of Agriculture, 501-2196384 or cami.davis@agriculture.arkansas.gov. or review information about the program at arkansas.agriculture.gov.
