Agricultural mediation programs can significantly reduce resolution costs and personal angst for conflicts between agricultural producers, their creditors, neighbors or others directly affected. Benefits of mediation include significant savings over litigation, bankruptcy hearings and administrative appeals. Mediation can help repair relationships between parties, while the traditional legal process often leaves all parties financially burdened and emotionally drained.
Mediation helps all parties involved to settle disputes with terms and a settlement they come up with themselves. Neutral mediators work in-person or over the telephone to help participants resolve conflicts. In cases where the parties cannot be in a room together, mediators may use shuttle diplomacy visiting one party and then another. Unlike drawn-out, expensive court proceedings, most mediation only needs a few meetings to resolve a conflict. To maintain active participation and engagement, mediation sessions are typically one to four hours with breaks as needed.
Participation in mediation is voluntary. Many participants stay in mediation when they want to to maintain a good relationship with the other participants. Others stay because their Best Alternative to a Negotiated Agreement (BATNA) is not as good as an agreement they may reach in mediation.
When parties bring their conflicts into the American legal system, they hand over all decision-making rights to someone else. This may be the Worst Alternative to a Negotiated Agreement (WATNA).
In mediation, participants control and develop their own agreements. They feel ownership and general satisfaction with the outcome. Many mediation participants assume that others feel as they do. Mediation discussions often uncover differences in values and assumptions. Continued discussions improve all participants’ understandings of issues and conflicts therefore broadening resolution opportunities.
What is mediation?
All mediation, including USDA’s Mediation, gives participants a confidential way to resolve disputes. Farmers and ranchers can discuss details about their operations during confidential mediation sessions, knowing that their documents and mediator’s notes cannot be used in other legal action.
Trained, impartial mediators help people discuss their conflicts in a neutral setting (not on the farm or in an agency’s office). Mediators should ensure that all relevant parties are included in the mediation process to prevent an unworkable or incomplete agreement. This is especially important with multiple creditors.
All participants should prepare and review written materials before a mediation session. Agricultural producers can seek help from FSA staff to put together production and/or financial plans. In financial disputes, parties should bring asset appraisals, written farm business plans and projections under various scenarios and formal contracts.
Relevant resources may include feasibility plans, Cooperative Extension research/fact sheets, statistical tables or court records. Relevant external information may include stockholder and business partnership agreements as well as agency and lender contracts. Internal data includes business and personal income, expenses, market prices, interest rates as well as participants’ experience and history.
Mediators do not have decision-making authority. Unlike judges or arbitrators, mediators will not decide outcomes or force any party into a particular decision or action. Mediators do not look at “evidence” or assess who is right and who is wrong. Rather, these written materials will be utilized to ensure that both parties to the mediation have all relevant information to make informed decisions regarding the outcome.
Parties are encouraged to communicate effectively and to explore many types of solutions in order to find a mutually agreeable solution.
When parties reach agreements, mediators write them down in straight-forward language and include a timeline. All parties sign the agreements. When parties reach an impasse, the case will be closed and the mediator must remind all parties that they may pursue other legal actions.
Who and what can be mediated?
The USDA Agricultural Mediation Program has effectively resolved numerous disputes. USDA program applicants, agencies, creditors, crop insurance providers, guaranteed lenders, borrowers or grantees may seek USDA Mediation over:
• Program eligibility
• Ability to repay farm loan program assistance
• Fair application of regulations
• Whether or not a producer is using Best Management Practices
• Asset appraisals for farm loan applications or loan servicing
• Crop Insurance – denial of claims
• Rural Development Programs (denials, foreclosures, loan servicing)
• Public access to private and public lands
• Wetland determinations
• Rural water loans
• Conservation Practice contracts and Reserve Programs
• Grazing or timbering on National Forest lands
• Highly Erodible Land/Water Conservation Program requirements
• Price support payments
• Farm Program compliance
• Farm Loan and Servicing Programs
• Production Flexibility Contracts
What cannot be mediated?
Laws, rules and eligibility requirements cannot be mediated. Examples include:
• Formulas for calculating payments
• Loan or other assistance available to an ineligible organization type
• Program assistance denial because income above program thresholds
• Interest rates set by law (Errors in implementation may be mediated.)
• Denial of program assistance due to Federal or State conviction for planting, cultivating, growing, producing, harvesting or storing a controlled substance
• Federal designations: flood plain determinations, archaeological area preservation requirements or areas designated as endangered species habitat
The USDA’s Certified State Mediation Programs began in 1988 to help farmers with delinquent and distressed loans negotiate with creditors to avoid bankruptcy or litigation. The Farm Service Agency (FSA) now administers the USDA’s Mediation Program. The FSA offers matching funds to states with a USDA Certified Mediator Program. Today, 38 states have a USDA Certified State Mediation Program.