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ARTICLE · 17 MAY 2016

Tread Carefully – Enforcement Of Farming Assets

Cox & Palmer
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The FDMA imposes notice obligations on the lender which are in addition to those prescribed by the Bankruptcy and Insolvency Act.

CanadaFinance and Banking
Ben Howard
Ben Howard
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Agriculture has long been a key industry in Atlantic Canada. Government's interest in promoting agriculture and protecting the family farm in the face of challenging economic conditions led to the implementation of the Farm Debt Review Act (the "FDRA") by Parliament in 1986 and its replacement by Parliament with the more robust Farm Debt Mediation Act ("FDMA") in 1998. The FDMA grants farm debtors unique rights not shared by other debtors in Canada and it imposes various procedural restraints on creditors seeking to enforce their rights. It creates unique challenges and risks for lenders that should be considered before lending and reflected in the commercial terms of the loan.

Prior to lending or attempting to realize on debt secured by assets in a farming operation, it is prudent to tread carefully and consider the following:

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