Farmers' Debts Adjustment Board

Full description

The Farmers' Debts Adjustment Board was constituted under Section 2(1) of the Farmers Debts Adjustment Act 1935 (No. 4326). The Board was to consist of three members appointed by the Governor in Council with the chairman being a person experienced in legal and business matters. One other member was to have practical farming experience and the other was to have commercial experience. The Act was proclaimed on 24 December 1935 and the first Board was appointed on that day (see Government Gazette 8 January 1936, p. 57). It appears that the Board reported to the Treasurer, as the Board appears under the Treasury Votes in the Annual Finance Statements.

The Farmers' Debts Adjustment Board was the successor to the Farmers Relief Board (VA 2267). With the passing of the Rural Finance Corporation Act 1949 (No. 5414), the Farmers' Debts Adjustment Board was dissolved on 26 April 1950 and succeeded by the Rural Finance Corporation (VA 2272).

The Farmers' Debts Adjustment Board was responsible for the administration of the Farmers Relief Acts. This included Part II of the Unemployed Occupiers and Farmers Relief Act 1931 (No. 3962), subsequent Farmers Relief legislation, and the Farmers Debts Adjustment Act 1935. See VA 2267 for a description of the earlier Farmers Relief Acts. The Board was later also responsible for the administration of the Farmers Protection Act 1940 (No. 4737) and the Farmers Protection Act 1941 (No. 4877).

In 1935 the Commonwealth allocated 10 million to the States for the purpose of adjusting debts of farmers who were in financial difficulty as a result of adverse seasonal and economic conditions. The Farmers Debts Adjustment Act was developed to manage plans of debt adjustment using the 2.3 million of Commonwealth funds allocated to Victoria.

The Farmers Debts Adjustment Act did not repeal all of the provisions of the previous Farmers Relief Acts. However farmers applying for protection under the Farmers Debts Adjustment Act were ineligible to apply for protection under the earlier Acts. Any existing Protection Certificates were cancelled when a farmer was issued a Stay Order under the 1935 Act. It is not clear whether farmers continued to apply for protection under the earlier Farmers Relief Acts once the Farmers Debts Adjustment Act was proclaimed.

Under Section 12 of the Farmers Debts Adjustment Act, farmers were able to apply for an adjustment of debts to a local Conciliation Officer.These officers were under the control and direction of the Board, and were charged with the local administration of the Act. On receipt of an application, the officer issued a Stay Order that protected the farmer from any action, execution or proceeding in respect of any debt of the farmer. The Conciliation Officer was responsible for working with the farmer and the farmer's creditors to develop a plan of debt adjustment, taking into account the farmer's prospects and the interests of all parties concerned. The Conciliation Officer submitted the plan to the Board for confirmation or refusal.Stay Orders stayed in place until cancelled by the Board.

It appears that once a plan of debt adjustment was approved, the Board took responsibility for managing the case. Throughout the period of the stay order or plan, the farmer was required to supply to the Board information on receipts and expenditure, and was required to seek the Board's approval in the disposal of assets including property. A plan of debt adjustment could include the cancellation of Crown debt, or the Board consolidating the farmer's debts and paying creditors. Any monies paid by the Board on the farmer's behalf were repayable by the farmer over a lengthy term and could be secured by a mortgage on the farmer's property.

Under Section 43, the Board was able to recommend to the Closer Settlement Commission (VA 2268) that advances be made to enable a farmer to continue farming operations. Subsequent Farmers Advances acts made reference to Section 43, so that the Board was able to recommend payments under those acts (eg. Drought Relief Act 1940 (No. 4782)).

All applications under the Farmers Debts Adjustment Act had to be submitted by 24 December 1937, although later legislative amendments extended the application date to 30 June 1944. As there were no current provisions for debt protection for farmers in 1940, the Farmers Protection Act 1940 (No. 4737) was introduced. It was repealed a year later by the Farmers Protection Act 1941 (No. 4877). Both Farmers Protection Acts included provisions for the development of plans of debt adjustment, and for debt protection through the issuing of protection or stay orders. Both Acts generally applied to debts incurred prior to the commencement of the 1940 Act on 9 September 1940. The Board was responsible for managing all cases under both Farmers Protection Acts. Farmers applied directly to the Board for protection or stay orders.

Under the Farmers Protection Act 1940 creditors were required to give farmers 21 days notice of their intention to take action to recover any debt. On receipt of such a notice, the farmer could apply to the Board for a Temporary Protection Order. During the period the order was in force, the Board was to negotiate with the farmer and the creditor to secure an adjustment of debt. If negotiation failed, the Board was able to issue a Conditional Protection Order, taking into account any benefits available to the farmer under the Farmers Relief Acts.

The Farmers Protection Act 1941 tightened the process whereby farmers could apply for protection. Farmers could apply for a Limited Stay Order in relation to debts incurred before or after 9 September 1940. In certain circumstances the Board could issue a General Stay Order in relation to other debts. Once an order was issued, the Board was to continue to seek an agreement between the farmer and the creditor in relation to adjustment of the debt. The Board was able to control the income of the farmer during the operation of any order. Under the 1941 Act farmers could apply for protection until 1 March 1943. Later amendments extended the application date to 1 March 1948 and the expiry date for all stay orders to 1 March 1949.