LSP Calls for Mediation Period & Moratorium on Farm Foreclosures to be Extended to 180 Days to Accommodate Harvest, Volatile Market Situation
SAINT PAUL, Minn. — The Land Stewardship Project (LSP) applauded the Minnesota House and Senate for passing legislation Tuesday that would place a 60-day extension on farm financial mediation periods in the state. The extension was part of the Legislature’s latest COVID-19 relief package. LSP also called on lawmakers to extend the mediation period and a moratorium on farm foreclosures to 180 days to accommodate the planting and harvesting of crops while allowing the current volatile market situation to settle down.
“The Legislature’s action today is a positive step, and an example of leadership at a time of crisis due not only to COVID-19, but also pressure on farm families in economic crisis unable to effectively exercise the right to mediation as afforded them by law,” said Joel Penner, a hog farmer and LSP member from Butterfield, Minn. “Now we need to build on that to make this time-out an even more effective way for farmers to focus on staying healthy and growing the food we all need.”
The Minnesota Farmer-Lender Mediation Act calls for a specific set of steps to get an indebted farmer and their lender to sit down with a mediator (and often a Minnesota Department of Agriculture Farm Advocate) to work to resolve a financial situation via renegotiation, restructuring or other steps short of foreclosure. In recent years, this hands-on approach has been successful 85% of the time. As a result of low commodity prices paid to farmers and lack of access to consistent markets, the number of farmers eligible for mediation has risen to near the levels last seen during the catastrophic farm crisis of the 1980s. More than 3,800 Minnesota farmers were eligible to participate in this process last year, with most selecting mediation.
With the current restrictions on face-to-face interactions as a result of the coronavirus pandemic, it is virtually impossible to have the kinds of trust-building meetings required to have a successful mediation process. In addition, the pandemic has further undermined a volatile farm commodity market that was already making it extremely difficult for farmers to make debt payments.
“By extending mediation and placing a hold on foreclosures for 180 days and thus accommodating the harvest schedule and the current crisis market situation, we can give farmers a chance to project a positive cash flow,” said Paul Sobocinski, a livestock farmer from Wabasso, Minn., and an LSP policy staff member.
During a series of meetings held across the state this winter, LSP farmer-members repeatedly called for numerous bold steps to address the current farm crisis, which has been exacerbated by the coronavirus pandemic.
“Farmers and the communities they support now more than ever need a strengthened Farm Advocates Program, opportunities to restructure loans, affordable healthcare, farmer-owned cooperatives that have their back, and a halt to expansion of massive dairies flooding the market with excess production,” said Canton, Minn., dairy farmer Bonnie Haugen. “Farming is everybody’s bread, butter and water.”