ND Department of Agriculture Comments, Speeches and Testimony
Testimony to the Subcommittee on Agriculture, Rural Development, Food & Drug Administration, and Related Agencies in support of the $4 million mediation grant line item in the USDA budget
Testimony of Roger Johnson,
North Dakota Commissioner of Agriculture
March 6, 1997
Introduction
I am writing in support of the $4 million appropriation to the mediation grant line item in the United States Department of Agriculture budget.
North Dakota is one of twenty-two USDA certified agricultural mediation programs currently funded at a 70 percent rate for allowable activities by the federal government through this appropriation. During the last two years, all state mediation budgets have been reduced by about 25 percent. This has occurred because of the $2 million appropriation that has been allocated for the mediation programs nation-wide for FY 95 and FY 96. With the increase of states that are becoming USDA certified mediation programs and current programs which are expanding the scope of mediation, $4 million is needed to continue this cost-effective program.
The North Dakota Program
The AMS has provided negotiation services to financially distressed farmers, ranchers, and their creditors since 1984 when it was established as the Farm Credit Counseling program. In 1989, legislative action changed the program's name to the North Dakota Agricultural Mediation Service. As a result, we began providing mediation services to the involved parties as well. This change in services resulted from the federal Agricultural Credit Act of 1987, which requires the Farm Service Agency[FSA] and Farm Credit Services[FCS] to use mediation prior to foreclosing on delinquent farm loans. In 1991, the legislature expanded the services we provide to include mediation of any dispute involving farmers.
Mediation is often viewed as an extension of negotiation involving the intervention of a neutral third party. It always involves a voluntary solution, if any, since the parties to the dispute retain all decision-making authority. The mediator is trained in the problem-solving process but has no power to impose a solution on the participants.
Most of our cases continue to be ag credit related. However, since 1991 we have also been involved in the following types of agricultural cases:
- FSA farm program eligibility
- CCC loans and grain quality concerns
- Seed disputes
- Beginning farmer assistance
- Weed control conflicts
- Landlord-tenant disagreements
- Water concerns
In North Dakota, mediation is a voluntary process for all farmers and most creditors. It is mandatory for FSA and FCS. The Bank of North Dakota [BND] by policy also requests mediation on their delinquent loans in an effort to avoid foreclosure. However, there is never a forced decision as a part of mediation. If there is no agreement reached between the parties, they are free to pursue legal remedies, including formal appeals. When a decision is reached, it is a mutually acceptable decision. Because of this, mediation agreements are generally long-lasting and satisfying to the parties involved.
An essential component of mediation is that all information shared by the parties with the mediator remains confidential. NDCC 6-09.10-10 guarantees the confidentiality of AMS records; all client files are kept under lock and key. Studies have shown that adherence to this principle of confidentiality results in a greater likelihood that the parties will come to a mutually agreeable solution to their problem.
Credit Board Review
The state CRB establishes the policy under which the AMS operates and pays close attention to the fiscal constraints under which we operate.
Why should the Mediation program continue?
- It has saved lives. I am convinced the AMS has prevented farm suicides. We work very hard to prevent an atmosphere that is conducive to violence. Over the years, a number of law enforcement personnel have told us they are grateful that our program is in operation.
- It promotes community harmony and decreased conflict. The win-win results often achieved via mediation are in stark contrast to the win-lose results so often seen with foreclosures and bankruptcies.
- It is cost effective. Many studies have been done which show the financial advantage of mediation over appeal and litigation.
- It is timely. Mediation frequently solves problems within a month or two as contrasted with formal appeals which often take months to conclude or litigation which may go on for years.
- It is private and allows the farmers to maintain their dignity. I have seen the humiliation and self doubt which grip farmers who are unable to pay all their obligations and who are forced to watch their livelihood, and in many cases their heritage, slip away from them for reasons beyond their control.
- It works. In North Dakota we reach agreements between farmers and creditors most of the time. In many cases, the only option remaining for the creditors was foreclosure, and the only remaining option for the farmers was bankruptcy.
The federal government, through the USDA Reorganization Act, has expanded the use of mediation in an effort to reduce costs, cut red tape, and increase customer satisfaction. The Reorganization Act provides that certified mediation programs may also provide mediation services for wetland determinations, farm program compliance, agriculture credit, rural water loan programs, pesticides, and other issues.
As you are aware, the U.S. Department of Agriculture's Office of Inspector General (OIG) has been conducting an audit/evaluation of the mediation grants program.
The NDAMS does not object to an audit/evaluation by OIG for the purposes of determining the appropriate use of federal funds and evaluating the effectiveness of the mediation program. However, OIG's insistence on obtaining the names and addresses of mediation participants is disturbing since these objectives can surely be achieved without identifying program participants. Further, the responsibility for approval or disapproval of any action involving USDA issues lies solely with the Agency and it is inappropriate for OIG to solicit supporting documentation from mediation programs. The information is available from and should be reviewed through the Agency.
The entire premise and process of mediation is based on confidentiality. Mediation is designed to provide parties with an open and confidential forum to speak freely and openly about the issues before them without fear of reprisal. In the act authorizing mediation, (7 U.S.C. 5101(c) (3)), and in the federal regulations, (7 CFR 1946), it is required that state mediation programs "provide that the mediation process be confidential". This confidentiality requirement is one item on a short list of state requirements to become certified. Likewise, most states currently participating in the agricultural mediation grants program have statutes that require confidentiality of mediation case files to meet this federal requirement.
In summary, NDAMS understands and appreciates the need for USDA/OIG to verify the appropriate use of federal funds. We support that effort and continue to seek an acceptable resolution on the confidentiality issue. We believe a compromise which will satisfy USDA/OIG needs yet allows state programs to ethically and legally guard confidential client information is attainable. Anything short of such an agreement will surely destroy the integrity of and public confidence in the agricultural mediation programs and mediation programs of all types that are flourishing in our society.
We should remain a part of the effort - an effort to streamline government and to move decision-making to the lower levels of government. Mediation is an important part of that goal. I hope that you will do what you can to continue funding of the mediation program.
Attached are the following exhibits:
- New and active clients for past three years Mediation requests by quarter for the past three years
- AMS Brochure
- provides public information
- describes current services
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