About Mediation

Image of steer on the range in New Mexico

What Is Mediation?

When the bills pile up, so do the misunderstandings between borrower and lender. Mediation brings the disputing parties together in a neutral setting with a trained, impartial mediator to work out a solution where everyone "wins." Mediation provides a forum for borrowers and creditors to resolve their financial disputes and explore any options that can keep the family farmer in business and keep our rural communities viable.

The process promotes calm and rational discussion of the issues to identify goals and options, reduce fault-finding and construct a plan that will benefit borrowers as well as creditors. All participants in the mediation process get to speak and be heard. Mediation is an efficient and economical way to resolve disputes.

However, this is a voluntary settlement process. Mediation is not legally binding and the mediator has no power to find fault or impose a particular solution. the goal is to help all parties to reach agreement on an acceptable course of action.

Where Does One Go For Mediation?

Contact the New Mexico Agricultural Mediation Program at 1-800-289-6577 to request the mediation service. They will contact all of the parties involved to arrange their participation and will help assemble the necessary information.

There are six volunteer mediators located in communities across New Mexico, from Taos to Lordsburg. In order to protect the privacy of all involved, a mediator may be assigned from a different part of the state to reinforce confidentiality.

The New Mexico Agricultural Mediation Program is authorized by the New Mexico Secretary of Agriculture. The program, certified by the U.S. Department of Agriculture, is administered by the Cooperative Extension Service at NMSU.

How Is Mediation Initiated?

The mediation process can be initiated by any agricultural producer that has received an adverse determination from the Farm Service Agency, the Natural Resource and Conservation Service, the National Forest Service, or any agricultural lender, by contacting NMAMP.

The mediation process used by NMAMP can be described by the following steps:

  • Initial contact with parties
  • Selecting a strategy to guide mediation
  • Collecting background information
  • Designing a plan for mediation
  • Building trust and cooperation
  • Beginning the mediation session
  • Defining issues and setting an agenda
  • Uncovering hidden interests of the parties
  • Generating options for settlement
  • Assessing options
  • Final bargaining
  • Formal settlement.

New Mexico is a "voluntary" mediation state, which means that mediation will not take place unless all necessary parties agree to mediate the dispute. When a written request for mediation services is received by the NMAMP, the other parties who are necessary in order to achieve a settlement are contacted to secure their agreement to participate. The agreement of a party to participate in the mediation process normally implies an agreement to forbear or abstain from taking adverse legal actions during the time the case is in mediation. If the other necessary parties do not agree to participate, or do not respond within the allotted time, the requesting party will be notified that mediation has been declined.

How Is Mediation Terminated?

The mediation process is terminated when a mutually agreeable settlement is reached by the parties. However, in keeping with the voluntary nature of the mediation process in New Mexico, the requesting party may terminate the mediation process at any time, with or without cause, by written notification to NMAMP. NMAMP may terminate the mediation process when a party fails to respond within 15 days to a request for information or offer of settlement. Likewise, NMAMP may terminate the mediation process at any time if it is determined that further efforts at mediation are no longer worthwhile.

What Are The Benefits Of Mediation?

Typically, the mediation process allows for a much quicker resolution of a dispute than litigation. Also, mediation is less expensive than litigation or the formal appeals process. But perhaps most importantly, mediation provides a mechanism for resolving disputes that does not destroy the relationship between disputing parties.

The mediation process encourages the participation of the disputing parties in the negotiation process. This is important since the parties are in a position directly communicate their needs from a settlement. Also, the mediatior may be able to assist the parties in crafting compromises because information can be furnished in confidence to the mediator by both sides. This allows the disputing parties to reveal to the mediator reasons that a particular offer is not acceptable along with potential ranges for settlement.

Agreements reached in mediation typically have a very high rate of compliance. This is because the disputing parties actually participate in the development of the settlement agreement. Most other processes either impose a solution on the parties very limited participation in the development of an agreement.

The benefit derived by the producer is dependent upon the outcome of the mediation process as well as the type of dispute. In credit mediation, if the outcome results in debt restructuring, the borrower maintains his way of life and continues to farm. If the outcome results in the borrower no longer farming, such as a total voluntary liquidation, the borrower still receives the benefit of the fact that the outcome was reached voluntarily and was not imposed. Furthermore, voluntary liquidation often allows the borrower to retain assets that would have been forfeited under a forced liquidation because amounts received for assets under voluntary liquidation are typically much higher than when assets are sold under forced liquidation. Also, the borrower may not be faced with the negative social stigma typically associated with foreclosure or bankruptcy.

Outcomes that result in voluntary debt settlement or loan restructuring allow the borrower to continue with feasible operations that in turn generate the cash flows necessary for debt service. This results in a performing loan for the lender that is therefore profitable. If the outcome results in voluntary liquidation, the lender benefits by avoiding time and expense associated with foreclosure. Also, in situations where equity positions are approaching zero or have totally eroded, the lender stands a much greater chance of having a debt fully satisfied if liquidation is voluntary.

In non-credit disputes, the producer is provided with a mechanism that allows for an inexpensive non-threatening process to resolve a dispute in a timely manner. Mediation provides the producer with a neutral confidential setting where he/she can explain and discuss the nature of the dispute from his/her own standpoint. Furthermore, the mediation process does not pose the intimidation factor that is often present in litigation or appeal.

Settlements in mediation help to keep cases out of the USDA appeals process as well as State and District courts. This translates into substantial savings to USDA in the form of administrative costs. However, the greatest benefit derived from mediation is intangible. This is the benefit of improved communication that results in strengthened ties and relationships. The mediation process tends to leave the parties with a greater sense of satisfaction than litigation because the process is designed to increase the understanding of all the parties.

What Is NMAMP's Role In Mediation?

NMAMP serves in an impartial third party role to ensure that the mediation process moves forward in a fair and orderly manner. NMAMP can advise, counsel, and assist the parties in their efforts to reach a mutually agreeable solution; but NMAMP can not and will not tell the parties how they should conduct their business or personal affairs. Nor can NMAMP impose any particular agreement on the parties. Instead, it is NMAMP's responsibility to insure that all participants in the mediation process are given the opportunity to speak and be heard,

  1. Help define the issues,
  2. Emphasize common goals,
  3. Keep negotiations focused,
  4. Facilitate the development and discussion
  5. Of options, and
  6. Reduce fault-finding.

Mediators that represent none of the parties are assigned in each case to preside at a meeting of the disputing parties. In mediation, the mediator acts as a neutral facilitator and aids the parties in generating and evaluating options. The mediator may caucus (i.e., communicate privately) with any of the parties, either before, during, or after the meeting in an effort to facilitate the settlement process.

The mediator is impartial, knowledgeable in the mediation process, and familiar with agriculture. If the mediator assigned to a case is unacceptable to any of the parties, another mediator is assigned.

What Is The New Mexico Agriculture Mediation Program?

The New Mexico Agricultural Mediation Program (NMAMP) mediates agricultural disputes between farmers and ranchers and USDA throughout the State of New Mexico. The program is administered by the Cooperative Extension Service at New Mexico State University and has been certified by the U.S. Department of Agriculture.

The NMAMP provides a voluntary alternative to litigation, arbitration, or formal appeals through the use of an impartial third party mediator. The mediator facilitates communication and assists the parties in resolving their disputes. Mediation allows disputing parties to discuss options in a controlled setting and provides all parties the opportunity to express their views and provide input toward the solution. The mediator does not impose his/her own judgement on the issues for that of the parties. Thus, the mediation process is an extension of the traditional negotiation process with the addition of a third party to assist in negotiations.

The New Mexico Agricultural Mediation Program mediators are impartial and well trained. The NMAMP does not and will not use mediators that are advocates, lenders or Farm Service Agency borrowers. The active mediators have undergone extensive training and continue to receive formal training each year.

What Do Participants Say About Mediation?

  • Mediation has been helpful and I believe the process continues to develop and improve as everyone has become more familiar with the system. Mediation is necessary for borrowers/lenders to work out issues..." -Lender in North Dakota
  • "Keep up the good work. We've used them [mediation program services] for six or seven years now, usually with good results."
    -Lender in North Dakota
  • "We need it here very much, to help farmers. [Mediation services] are very good and help you with all questions. We need them."
    -Farmer in North Dakota
  • "I think this is a very good program. It should be used more to help all farmers and ranchers. I personally was very satisfied with this session."
    -Farmer in South Dakota
  • "Expressing new ideas allowed for an alternate solution to the problem"
    -Lender in South Dakota
  • "It was a good meeting with a pretty good outcome. I think it is an outstanding way to bring two sides together, after talks have broken off, to resolve their differences. Thank you."
    -Farmer in South Dakota
  • "The mediator did do a good job of keeping the conversations going and focused, and in recording the deal. He did an excellent job exploring alternatives and turning the borrowers thoughts into actual figures that can be discussed. He made mediation very worthwhile for both parties."
    -Creditor in Nebraska
  • "[I]t was the first time we had gotten together with someone [from the bank] who had the authority to make a decision. Finally we were able to communicate face -to-face with the person we needed to talk to and we walked away with a successful resolution."
    -Farmer in Nebraska
  • "We appreciate the time and efforts expended by [the mediator] under the auspices of the Oregon Farm Mediation Program. The mediation offered the parties an opportunity to exchange views and perceptions. The mediation clearly served as an indispensable foundation for the settlement that was ultimately reached."
    -Farmer Attorney in Oregon