Paul Sobocinski

Paul Sobocinski talks about the mistakes and victories during the 1980s farm crisis; farmers used grassroots efforts then to make changes in the Minnesota legislature.

As a sign of the dire financial situation the state's agriculture faces, the Minnesota House and Senate unanimously passed legislation last week protecting farmers fro foreclosure.

The legislation stops foreclosures until December for farmers who elect to take part in creditor mediation.

Paul Sobocinski, who farms near Wabasso in southwestern Minnesota, said the state’s mediation law provides farmers the opportunity to negotiate with lenders during times of crisis, and this legislation makes it possible to make full use of that opportunity.

“Farmers need to be aware of their rights under this important new law,” he said in a news release. “Any farmer in financial straits needs to accept their right to mediation to receive protection from foreclosure through harvest time. This buys farmers time for the markets to recover, Congress to act on farm price gouging, and federal aid to come to farmers.”

Sobocinski worked with Land Stewardship Project’s (LSP) Farm Crisis Campaign to support the legislation, which builds on Minnesota’s Lender Mediation Act.

The mediation act was passed in 1986 in response to the many forced foreclosures that took place during the 1980s farm crisis. It requires any creditor foreclosing on agricultural debt of $15,000 or more to provide the debtor a legal notice of their right to mediation by a neutral state mediator. If this right is taken up within a 14-day period specified in law, the legislation normally provides for a maximum of 90 days to reach agreement.

The legislation passed last week extends the mediation time frame to 150 days or Dec. 1, whichever is later, to allow for recovery from impacts of the COVID-19 pandemic.

“Everything in agriculture has been thrown up in the air and nothing has landed yet,” said Rep. Todd Lippert, D-Northfield. “We want to provide time for farmers to plant and harvest, time for livestock and milk markets to stabilize, and for federal support for farmers to become clearer.”

Lippert and Sen. Mike Goggin, R-Red Wing, advanced the legislation as a way to extend through harvest a 60-day extension that had been originally passed by the Legislature in April in response to the COVID-19 pandemic.

“Since passage of the first 60-day extension in April, things have gotten even worse for farmers,” said Senator Goggin. “We don’t want farmers and lenders to be rushed into farm-ending decisions in such a volatile ag marketplace. This legislation provides everyone time to work together.”

After years of low crop prices and high input costs, many farmers were already in a precarious financial situation before the pandemic struck. In Minnesota small and medium-sized dairy producers went out of business last year at nearly the rate of one-per-day. When COVID-19 disrupted the economy, markets and processing capacity disappeared overnight, resulting in milk being dumped and pigs and poultry being euthanized.

Bonnie Haugen, who has a dairy farm near Canton in southeastern Minnesota, testified in favor of the mediation extension law during a House hearing earlier this month.

“In the last two months the value of the monthly payment for our milk has dropped by about half,” she said. “That is unsustainable. This law extends important protections for us, and other farmers facing similar abrupt drops in market prices.”