Mediation Success Stories

As depicted in the success stories below, state mediation programs have resolved disputes in a great diversity of agricultural areas benefiting not only farmers, but also federal and state agricultural agencies, lending institutions, and virtually all stakeholders in the agricultural community. The following stories are representative of the work of the state agricultural mediation programs. In order to protect the confidentiality of the mediation process, we do not provide details that would allow identification of the parties.

Joint Fact Finding Helps Parties Resolve Dispute Over Wetlands

A farmer felt like he was stuck between a rock and a hard place. NRCS informed him that last year he planted corn in a wetland. In preliminary discussions with NRCS, the farmer was given a few options, none of which included ever planting the field again. The farmer did not like any of the options proposed and instead he contacted the state mediation program.

The former owner of the parcel cleared the land and even used portions for a gravel pit. The land was highly disturbed so NRCS made its determination based largely on soil mapping.

The farmer lived in the area his whole life, knew the past uses of the field, and earnestly believed it was not a wetland. NRCS adamantly maintained it was a wetland. The farmer hoped that mediation would enable him to avoid contentious and expensive litigation.

During the mediation, the mediator assisted the parties discuss options to resolve the dispute. Since there was disagreement on whether the field was a wetland, the discussion first focused on a variety of ways to make a wetland determination given the disturbed condition of the land. The options included leaving the field fallow for a few seasons until the vegetation necessary to make a determination returns, installing wells to monitor the groundwater level, and making the determination at a comparable adjacent field that was also designated as a wetland on the soil map.

The parties agreed to conduct the analysis on the comparable field. Instead of each expert making their own individual assessment and then arguing which expert was right, following the mediator’s suggestion, the parties agreed to a joint fact finding process where the experts would collaborate.

The parties scheduled a site visit and the wetlands experts conducted the wetlands determinations step by step together. Both experts agreed that it was a close call but ultimately they concluded that the comparable parcel was not a wetland and that the disputed parcel was not as well. Both sides were satisfied with the process and the mediation both resolved the dispute and helped repair a strained relationship.

Mediation Keeps Family Owned Orchard in Business

This case involved an orchard that had been in existence for generations. The orchard has a rich history in the state and is a popular destination for school field trips and family outings. One of the family members became seriously disabled and was not able to keep up with the physical demands of running the orchard. Several of the other family members were either not willing or able to “step-up” to assist with the daily orchard operations. The grower did the best he could but poor growing conditions/weather for the following ultimately brought the orchard to the brink of ruin. Family relationships quickly deteriorated, as did the grower’s health.

The grower applied for FSA Emergency and Operating Loan assistance, Disaster Set-Aside and Primary Loan Servicing. The Emergency loan was denied, but that decision was later reconsidered. The Operating Loan and Disaster Set-Aside were denied because the grower’s business plan did not demonstrate adequate repayment ability. The Primary Loan Servicing was also denied due to the grower’s negative cash flow.

The grower requested mediation with FSA representatives. As a result of mediation the parties agreed that the farmer would receive a Crop Disaster Payment. The payment would be made directly to the grower who agreed to use 100% of the money on operating costs in the coming season. The grower also agreed to pursue Business Planning assistance and immediately applied to the state’s Farm Viability Program. The grower then received assistance in implementing his new business plan. In addition, the state mediation program was able to provide a referral to the grower for a family mediator who ultimately worked with the grower and his family to resolve their differences and to put together a plan to equitably divide responsibilities for the orchard.

Mediation Resolves Dispute Over Loan Guarantee and Enables Farmer to Purchase Farm

For many years a farmer worked on the family farm along with his parents. As his parents approached retirement, he applied for several loans from a lending institution in order to buy the farm from his parents. His parents were counting on the proceeds from the sale of the farm for their retirement. In order for the farmer’s package of loans to be approved, the financial institution required that one loan had to be guaranteed by FSA.

FSA denied the loan guarantee, which meant that the farmer would be unable to borrow enough money to buy the farm. The farmer became extremely frustrated. He never felt like he was given adequate reasons why FSA rejected the loan guarantee and he requested mediation.

At the mediation, FSA was asked to present its concerns directly to the farmer. The farmer may not have agreed with what he heard, but he now understood FSA’s concerns. The mediator asked FSA if there was any way to address their concerns. FSA proposed a few extra conditions that would address their concerns. The farmer and lending institution accepted the extra conditions. FSA approved the loan guarantee and the farmer was able to borrow the money necessary to buy the farm.

Mediation Helps Parties Understand the Other Side’s Perspective

A couple living in a rural area in the east had been receiving payment assistance subsidies from Rural Development on their mortgage. There was a change in their adjusted annual income, and the payment assistance formula indicated that their payments would be increased significantly. The homeowners had experienced some changes in employment during the prior year, and did not agree with the revised payment level. They submitted additional documentation and believed that the problem would be resolved in their favor. When the decision was not altered, they became very frustrated and communications broke down.

The homeowner expressed a high level of satisfaction with the mediation process, even though the original decision was not changed. “The mediator helped clarify what I said. Now the calculations have been fully explained, and although there is no difference in the outcome (they didn’t change our payments) now I understand how they extrapolated from the figures I gave them, and I am satisfied.”

In addition, the homeowner felt empowered by the information and clarity that he gained through the mediation process. He felt he understood the regulations, his obligations, RD procedures, and how the formulas worked. “Now that I understand how they do their calculations, so if things change for me again I know exactly what to do.” In the exit survey he indicated that he had been given a chance to express his views, that he understood the other persons’ views, and that it had given him new ideas about how to resolve problems. When the homeowners started the process they felt very distrustful and frustrated at the lack of information and communication; at the conclusion of the mediation session they felt completely satisfied with the process and outcome, and more comfortable about working with Rural Development personnel in the future.

Mediation Improves Communication and Enables Farmer to Recoup Crop Loss

A farmer received a letter from FSA informing him that his request for Noninsured Crop Disaster Assistance Program (NAP) assistance had been denied. The farmer believed that his NAP claim should have been approved, however, and he requested to meet with FSA through the Ag Mediation Program.

The mediation process proved beneficial for the client (and FSA) in a few ways. As a result of the mediation session, FSA agreed to reevaluate a portion of the claim, meaning that the farmer could recoup some of his crop loss and thus remain on better financial ground. Secondly, the mediation was successful because the mediator was able to facilitate a discussion between the farmer and FSA regarding the circumstances which had led to the original denial. By talking things through, the parties were able to better understand each others’ assumptions, address and correct some past miscommunications, and agree on a procedure to follow regarding similar situations in the future. In this way, they could proactively work together to avoid the same type of issues down the road.

Mediation Enables Family and County Committee to Resolve CRP Dispute

This case involved Farm Service Agency, Mr. & Mrs. Land Owner, their son, the FSA Supervisor, and the County Committee. The landowner had given his son power of attorney for the farming operation while he was gone for six months for the winter.

The Mr. & Mrs. Land Owner offered acreage for enrollment in CRP in 1988 and again in 1997 and represented themselves as the legal owners of the land. They signed the CRP-1 contract and certified every year since as the owners of the land and had the annual contract payment paid to them since the original enrollment in 1988. According to the son’s information to FSA they never corrected the records at the FSA office, because he believed he was the owner of this land. Because he had power of attorney, the son received the denial letter concerning land ownership and went into the FSA office in a rage. The son then met with the county committee and was extremely upset again. According to the son he was the legal owner of the land. The son stated he could not take the CRP payments on this land because then he would have to report the income to the county and it would affect child support payments.

The County Committee was concerned for the parents who were well known and respected in the community. They wanted to wait until Mr. & Mrs. Land Owner returned. When informed in mediation by FSA what the son had done, Mr. & Mrs. Land Owner met with the County Committee to explain the process and what they had done as estate planning. Mr. & Mrs. Land Owner stated the land was to be given to the son as part of estate planning in 1988. The Supervisor and County Committee had been given erroneous information by the son. Information was clarified and this resulted in a workable mediation agreement.

Agricultural Business and Small Grain Producer Avoid Costly Litigation Through Mediated Settlement

The dispute involved an agricultural business and a small grain producer. The producer claimed services provided were of poor quality and actually caused substantial damages to the crops he had seeded. The dispute escalated and attorneys were retained by both parties. After considerable negotiation with no settlement a court date was set. At some point prior to the scheduled court proceeding, the attorney for the producer learned of the certified mediation program and recommended mediation to his client. The producer requested mediation with the agricultural business. The business accepted and one mediation session was held. The mediation resulted in an agreement being reached. Court was canceled and more costly litigation avoided.

Mediation Provides Loan Applicant with Road Map for Future Farming Operations

Applicant was denied credit to start up a farming operation on a small tract of land that he already owned. The loan request was to cover the purchase of breeding stock, farm equipment, fencing, and the first year’s operating expenses. Denial was based on credit history, lack of sufficient farming experience, and an unrealistic farm plan.

Through the mediation process, communication was enhanced, issues were discussed and reasoning was applied from both sides. Through itemized clarification Applicant realized: he needed time to clean up his credit history and debt load; and, he needed to begin working with a local farmer friend for operating experience, to include knowledge of actual cost and production expectations of this type farming operation.

Applicant became more aware of the real issues and no longer felt the denial was a personal assault. He and the creditor parted on a good working relationship. The Applicant is now working on steps to re-apply within a couple of years for the loan to fulfill his dream. No further appeal/legal action pursued.

Mediation Provides Opportunity For All Parties To Full Understand Financial Challenges of Farming Operation and Discuss Future Options

Two twin brothers, their sister and her husband all contributed to operating four modern chicken houses and a hay baling business. The chicken supplier stopped operating in the farm’s area, and the farm had to find a new supplier. Losses began to mount as a result of this supplier change. One of the brothers hurt his ankle, surgery was performed, but this brother could not help out on the farm and hay baling work for two years. Medical expense began to mount up. The brother in law was in the process of dying from cancer, did die after many months and medical expenses began to mount up. The serious reduction in available work hours among these four adults, changing chicken supplier and an increase in non-reimbursable medical expenses caused this farm to loose about one year of loan payments ($100,000.00).

At the mediation session, the bank admitted that if the farmer walked off the farm without a chicken contract and the bank attempted to sell the operation at a foreclosure sale, the bank could lose up to $300,000.00. But, the bank did not believe the farm could cash flow refinancing the past due balance into a new note. There was also a disagreement between the farmer and the banker over expenses (chicken, hay and personal) and all potential income (chicken, hay and personal).

All agreed to take the next six weeks to continue operating the farm(s), time to provide the last nine months of income and expenses from all sources and then come together again to reassess settlement options. Before the mediation session, neither side provided or asked for enough information to understand the problem(s) or solution(s) other than foreclosure.

The mediation session got the parties on an improved communication process, a greater understanding and trust of all resources for the farm, an improved prospect for preserving collateral and a continued reduction of total debt. These points are necessary, while they get a better understanding of the problems and develop more defensible settlement options on their own.

Landowner and Forest Service Resolve Grazing Dispute Though Mediation, Settlement Allows Agency to Protect Lands and Landowner to Maintain Operations

A landowner with two grazing permits on U. S. Forest Service (USFS) requested mediation upon receipt of a letter from the Forest Service permanently canceling 25% of both permits. The permits were for both cattle and sheep and cancellation would have had a detrimental effect on the landowners operation.

The permit cancellation was initiated based upon issues that had occurred during previous grazing seasons. The permittee disputed these allegations. As is common in most mediation cases, there was also miscommunication between the parties prior to the mediation request and personality conflicts had arisen as well. The issues brought to mediation included fencing, time spent in each pasture within the allotment, and communication.

With the help of the mediator, the parties and their respective attorneys developed a lengthy mediation agreement. The agency agreed to suspend the 25% permanent cancellation. Instead, the suspension was placed in effect for only four years. This change enabled the permittee to keep some cattle and sheep on the allotment and plan for the future. The parties also agreed to an extensive fencing project to help keep cattle in the proper pastures and protect certain sensitive areas (mainly riparian). The permittee and the agency agreed to work together to ensure that the fencing is completed over the next few years. They also put agreed to meet twice a year to improve communication and help prevent future issues from arising.

In this case, the mediation process helped the permittee maintain his operation and helped the agency protect the national forest lands for future generations.

Grazing Settlement Reached Through Mediation Concerning Reduction in Grazing Privileges and Maintenance of Fences

A group of grazing allotment permittees were given notice that their grazing privileges were being reduced by 25% for two years. The situation had been pending for a few years and involved a number of issues such as fence maintenance, trespass of permitted AUM’s (Animal Unit Month’s), season of use, etc. The area is highly utilized by recreation users which resulted in gates being left open, fences cut or let down, and contributed to the problems for the permittees and the land management agency.

Mediation resulted in agreements being reached that called for a 10% reduction in either length of use or AUM #’s for one year. The parties also agreed to timelines for installation of new stretches of fence and maintenance of existing fences and agreed to keep communication lines open between all of the parties. The mediation agreement also called for a 25% reduction in either length of use or AUM #’s if the agreement was not complied with. This would be effective for the following grazing season. Both entities agreed to work closer together to try and address the abuses from recreation users.

Farm Saved After Producer and NRCS Reach Mediated Settlement Over EQUIP Contract

A producer had applied for and was awarded an EQIP contract to install and implement conservation practices on a cost share basis. However, over a short period of time, the cost of materials needed more than doubled and this elderly farmer did not have the financial resources to complete the practices at the higher prices. Therefore, the producer requested termination of his EQIP contract at which time NRCS requested a refund of cost-share payments and recovery of administrative and technical services costs.

During mediation, the parties discussed the practices that had been completed and discovered that 5 conservation practices had been completed as per the EQIP contract and that it was not economically feasible for the producer to complete the other projects at this time given the dramatic increase in the cost of materials. As a result of this discussion, the parties agreed that the previously incurred cost share had been used appropriately. Also, it was agreed that most of the administrative and technical costs were incurred for the practices already completed. Therefore, the producer was allowed to terminate his contract and satisfy the appropriate recovery costs without having to liquidate his farm.