The Rural Voice, 1990-05, Page 46(for $20,000) and then they (the farm-
ers) have a mortgage they're having
trouble keeping up with, because of
high interest rates, which is with Farm
Credit Corporation."
Where the FCC is the major
creditor and the farmer is in good
standing with the rest of the creditors,
Wilkinson says, fast track is a good
idea. If the farmer is not in good
standing with his creditors, however,
it makes sense to go to a complete
hearing.
"If there are a whole bunch of
players that can pull the plug, at any
point, then it only makes practical
sense for him to have everybody in the
room sit down and go through a full
hearing process."
Another concern regarding farm
debt review has to do with the notifi-
cation of creditors.
Under Section 20 (for insolvent
farmers), all of a farmer's creditors are
to be listed, and the FDRB notifies
each creditor of the farmer's applica-
tion to the board. Wilkinson is not
critical of this procedure under Section
20. But it's a different story under
Section 16 (for farmers in financial
difficulty), he says.
Under Section 16, Wilkinson says,
unsecured creditors have been notified
of applications, and he has case his-
tories to prove it.
"I know of cases where even
creditors of down to $1,000 have been
notified, even if they're on your nor-
mal 30 or 60 -day accounts that aren't
in arrears," he says.
Bob MacKenzie agrees that credi-
tors are being notified of applications
under Section 16. "They are sharing
your financial underwear with your
creditors," he says, which can be
"catastrophic to the applicant."
"Under Section 16," counters
Michel Jobin, "the (FDRB) field -
person is instructed to gather all the
information pertaining to that debt to
that farm. The creditors are not noti-
fied under Section 16. They are not.
I know some people say that. It's
wrong."
"Now, one thing is interesting in
this," Jobin adds. "The act says that,
under Section 16, the panel may meet
with the creditors, and it's the decision
of the panel to meet with whomever
they feel they should meet with. And
that's where some people don't under-
stand it."
Wilkinson's rebuttal offers an
example. A farmer applied under
Section 16, he says. The farmer had
one major creditor (the FCC), a bit of
operating money at the bank, and a bit
at the UCO. The last two accounts
were in good standing. But the
farmer, Wilkinson says, was told that
the fast track method could no longer
be used, and that if he wanted to use
debt review he'd have to accept a full-
blown hearing. And then he was told
that even under Section 16 all of his
creditors would be notified.
The farmer withdrew his applica-
tion, fearing that his line of credit at
the local feed mill would be termin-
ated if the mill were notified of his
application for debt restructuring,
Wilkinson says.
That farmer might then carry on
the best he can, Wilkinson says, only
to end up before the board two years
later under Section 20, with everybody
sitting around a table saying "I wish
these people would come in here
sooner while there is some chance
of sorting it out."
"If you scare people away from
debt review by threatening to notify
every creditor, spooking them all ...
they won't go in for the review."
But while Wilkinson and Jobin
disagree about the interpretation of
statistics and exactly how the FDRB
operates, both are in favour of ex-
panding the mandate of the board.
Both would like to see a follow-up
procedure implemented, for example,
to ensure that the signed arrangement
is managed.
"Some assistance should be
provided to the farmer to assure that
he has the right tools to carry out this
arrangement," Jobin says. "It's very
uncertain, and the farmer is in finan-
cial difficulty already. He doesn't
have the money to go and obtain
some financial assistance."
Wilkinson agrees. "I think some
mechanism is needed through which
independent reviews can take place to
see whether, in fact, the follow up
should be instituted with a non-parti-
san group sworn to confidentiality."
A farmer going into a debt review
hearing is a novice going up against
experience, Wilkinson adds. Support
for the applicant is important, and in
this way independent farm consultants
can help from the outset.
A farmer going through the
system alone may not know who is
on his side until the dust settles, there
is a great deal of pressure at a FDRB
hearing, and there is no signed con-
tract between the farmer and the
FDRB fieldperson saying the field -
person is working for the farmer,
Wilkinson says.
Jobin says he doesn't object to
the use of independent consultants.
A farmer making an application to the
board is required to make a presen-
tation before the hearing panel. Some
don't feel comfortable, and some find
the experience emotionally upsetting,
Jobin says.
It's best that the farmer arrives at
the first board meeting well prepared,
Jobin adds, whether he has been
assisted by a lawyer, an accountant,
or a consultant. Jobin notes that the
FDRB will pay up to 50 per cent of
the costs for the assistance, to a
maximum of $1,000.
Wilkinson, in summary, says he'd
like to see a number of improvements
to the review process:
• the re -introduction of fast track,
• a limit on the notification of creditors
under Section 16, • some sort of farm
management and stress counselling for
people going through the debt review
process, • some mechanism through
which the FCC could enter negotia-
tions with a farmer without having to
go in front of the board to get access
to the money made available by Agri-
culture Canada for debt restructuring,
and • more money in that debt re-
structuring fund.
Jobin says he is satisfied that the
Farm Debt Review Board is meeting
the mandate of the Farm Debt Review
Act, but he says some changes, such
as expanding the program for follow-
up work, should be incorporated.
That's necessary, but not suffi-
cient, Wilkinson says. At a recent
OFA executive meeting, he adds, he
was given the task of sorting out some
of the problems. He says there are
still too many cases where a once -
viable farm operation has slipped, and
the Farm Debt Review Board doesn't
do enough to help the farmer regain
his footing.0
42 THE RURAL VOICE