The purpose of this Bill is to introduce Agricultural Debt Mediation as a mandatory step before the appointment of a receiver in respect of Agricultural Debt. The recent mis-selling of Interest Rates Swaps, which saw the Commerce Commission reach a settlement with affected banks, points to a need for mediation ahead of any action under a security.

Furthermore, agricultural debt is a large amount of money concentrated into very few hands standing at over $54 billion in the year to January 2015. Many farmers, according to Federated Farmers, are dissatisfied with existing dispute resolution options within the Banking Ombudsman Scheme. This Bill places obligations on the Banking Ombudsman Scheme to administer Agricultural Debt Mediation and through the Receivership Act, removes any financial limit for compensation.