Q: What is Farm Loan
Mediation?
Mediation is a process in which conflicting parties meet,
identify issues and work together to find possible solutions. This
informal and confidential process is facilitated by a neutral
third party, the mediator. The mediator does not make decisions
for the parties involved.
South Dakota is one of twenty-nine states certified by the USDA to
use mediation to assist their producers in resolving financial
disputes. The mediation process assists farmers, agricultural
lenders and USDA agencies to discuss options in an unbiased
setting outside the traditional legal process.
The South Dakota Farm Loan Mediation Program began on May 30,
1988. It has received over 4100 requests for mediation.
Q: What is the
Mediation Process?
If the borrower owes $50,000 or more, agricultural lenders are
required by law to request mediation before taking any legal
action on a loan. Once mediation is requested, the borrower is
notified that a request has been filed. The borrower can
participate in mediation or waive their right to mediate.
After the Director mails the notice of Mediation, the borrower
will indicate his intent to proceed with mediation by responding
in writing within 10 days. If the borrower wishes to proceed, a
mediation session will then be scheduled. All parties involved are
contacted with the date, time and location of the mediation. A
borrower who fails to respond within 21 days of receipt of the
notice is considered to have waived mediation.
The mediation sessions are under the control of the mediator. All
information provided by the parties during the mediation must be
held in strict confidence by the mediator. Each participant must
have the opportunity to speak and state his or her position. All
parties to the proceedings must make a good faith effort to
resolve the dispute.
If the participants reach a tentative agreement, the mediator
prepares a written agreement. After the details are reviewed and
approved by all agreeing parties, those parties and the mediator
are required to sign the agreement. If an agreement is not
reached, the parties may request another mediation session.
Q: What is the Cost
of Mediation?
Participants are charged $50.00 an hour for the first hour and
$25.00 for each additional hour or fraction of an hour.
Q: Who are the Mediators?
Mediators provided by the South Dakota Agriculture Mediation
program are contracted with the state to provide this service.
Each mediator has undergone training on the mediation process,
mediation skills, and agricultural farm finance issues. The
mediators are neutral parties in the mediation and do not make
decisions regarding the mediation.
Q: How long will
the process take?
The total mediation period will be for a term of 42 days after
the date the Director issues the notice to the borrower. During
that time the mediation session will be held.
An extension of the initial 42-day mediation period may be
acquired when all parties agree to extend the time period for the
mediation.
Q: What are
the advantages of mediation?
All information shared during mediation is confidential.
Participants create their own mutually agreeable solutions.
Provides a timesaving, affordable alternative to appeals and
litigation.
Helps restore communication between disputing parties.
Results in longer lasting, successful resolution of the dispute.
Q: How do I prepare
for mediation?
Preparation is the key element for mediation to be successful.
It is very important that you are prepared for the mediation
meeting in order to make the most of the time and money you put
into it.
Q: Where can I
find financial help?
The Department of Agriculture provides help to farmers and
ranchers through the Ag Finance Counseling program. Finance
counseling can help producers understand their financial situation
and make informed decisions. This assistance is free of charge to
the producers. Click Here for more
information on the Ag Finance Counseling Program.
Dawn Letellier, Director of Ag Finance Counseling Services
1-800-228-5254 (In State Only) or 605-773-5436
