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Farm Loan Mediation | South Dakota Department of Agriculture

Agricultural Mediation

Farm Cattle  Harvest

Debtor - Creditor Mediation:
The Farm Loan Mediation program was established in 1988 by the South Dakota legislature. Mediation helps agricultural creditors and debtors by bringing them together with a neutral person, called a mediator, who assists in resolving their financial disputes in a confidential setting.  The goal of mediation is getting the borrower and lender to work together, discuss options and find the best solution for all involved. Mediation can be instrumental in avoiding litigation and resolving disputes.
There are two types of debtor/creditor mediations; voluntary and mandatory.  Agricultural creditors are required by law to request mandatory mediation before taking any legal action on agricultural debt of $50,000 or more. Any agricultural debtor or creditor can request voluntary mediation to help resolve a financial dispute of any amount. All information is strictly confidential.  A creditor is any person or business that has extended credit; i.e. bank, credit union, veterinarian, feed store, or elevator, to name a few.  Each debtor and creditor is required to pay an initial fee of $100 to cover the first hour of mediation.  Each party is also charged $25 for each additional hour or fraction thereof of mediation.

Federal Land Mediation - Oil and Gas Mediation:
Federal Lands Mediation and Oil and Gas Mediation areas were added to the Agricultural Mediation program within the SD Department of Agriculture by the South Dakota legislature in 2013. Disputes over grazing issues; as well as oil and gas disputes related to surface agreements, damages, property, etc. are eligible for mediation under this program. Each party is required to pay an initial fee of $200 to cover the first hour of mediation.  The parties are also required to equally share the additional expenses of mediation including the cost of the mediator.

Water Drainage Mediation:
The Agricultural Mediation program expanded in 2015 to include Water Drainage Mediation.  The program is limited to parties that own or administer real property in the state.  The program is voluntary and must have at least two parties that agree to mediate as a method to resolve disputes over the surface or subsurface drainage of water. Each party is required to pay an initial fee of $200.  The parties are also required to equally share any additional expenses of mediation including the cost of the mediator, mailing fees, and publication fees.  There is also a process to intervene in a case should a person feel they are impacted by the drainage activity and meet the criteria to intervene.  There is a $200 fee to request intervener status.  If the mediator grants intervener status, the intervener becomes a party to the case and is required to share in any expenses.

Forms:

Related Resources:

How does the process work?

  • The party wishing to initiate mediation must submit the request in writing to SDDA on the correct form.  It must include the proper fee and the contact information for the party(s) with whom mediation is being sought.
  • Upon receipt of the request for mediation, SDDA will send a letter to the other party stating that mediation is being requested with them. SDDA will also send a mediation form to be completed by the other party. This form requires a signature and that party either agrees to participate in mediation or rejects the request.
  • If mediation is rejected or there is no response, the party requesting mediation will be notified.
  • If mediation is requested and the proper fee received, SDDA will assign a mediator.
  • If a mediator is assigned to the case, that mediator will notify all parties, set the time and place for the mediation session and complete the mediation process in accordance with South Dakota and national standards for mediation practice and ethics.
  • For Water Drainage Mediations, a Notice of mediation session will be published in the local newspaper for two consecutive weeks.  Any party wishing to intervene in the case will be provided instructions in the Notice.  The Mediator will review the form for application for intervention and if the proper fee is received and intervener status is granted, the intervener will become a party to the mediation and be required to pay a portion of any additional fees incurred.
  • The mediator shall manage the mediation session; including keeping the parties informed of the process, working with the parties to find an acceptable time and place for the mediation if an extension is requested; and to facilitate communication between the parties in an effort to reach a positive solution to the issues that are important to the parties.
  • If an agreement is reached, the mediator shall summarize the terms of the agreement and acquire signatures of all parties. Parties will receive a copy of the agreement.
  • When mediation is closed, the parties will be invoiced for mediation if applicable.

The Benefits of Mediation:

  • Provides a rapid time frame for decisions.
  • Provides an opportunity to avoid costly litigation.
  • Provides a confidential forum to discuss complex issues.
  • Promotes fair solutions to both sides of the dispute.
  • Provides alternative solutions to issues and problems.
  • Provides mediators who are neutral facilitators only.

For More Information:
SDDA Agricultural Development Division, 523 East Capitol Avenue, Pierre, SD  57501
Terri LaBrie, Finance Administrator
Phone: 605.280.4745