About the evaluation
- The Office of Audit and Evaluation (OAE) planned to conduct an evaluation of the Farm Debt Mediation Service (FDMS or the Program) as part of the 2021–2022 OAE Plan. In the interim, the Program engaged a consultant to undertake an evaluation-like review as part of the 2021 Parliamentary Review of the FDMS. Thus, rather than conduct a full evaluation, the OAE conducted a review to validate the work of the consultant, conduct any additional analyses and deliver its own summary evaluation report.
- The evaluation focused on FDMS activities carried out from 2016–2017 to 2020–2021. The following methods were used:
- document and data review
- a survey of farmers
- a survey of stakeholders (including experts, creditors and mediators)
- interviews with farmers, creditors, financial experts, mediators and Program officers.
What we found
FDMS summary
- The FDMS is a federal service administered through Agriculture and Agri-Food Canada (AAFC) and is rooted in the Farm Debt Mediation Act (the Act).
- The FDMS offers financial counselling to farmers having difficulty meeting their financial obligations and offers mediation to help them and their creditor(s) arrive at a mutually acceptable solution.
- To be eligible for the FDMS, a producer must farm commercially and be insolvent (that is, unable to make their payments on time, have ceased making payments, or have debts exceeding the value of their property, if sold).
Relevance
- There is a need for financial counselling type services for farmers having difficulty meeting their financial obligations, including debt mediation and insolvency services. When a farmer is facing insolvency they can consider the FDMS or another service available from the private sector or the provincial government if the creditor is foreclosing on farmland located in Saskatchewan. FDMS is the federal government solution for addressing this need.
- The FDMS is aligned with departmental priorities, as it helps to strengthen financial resiliency of the sector.
Performance
- The FDMS has seen a decline in usage over a 10-year period to less than half the number of users.
- FDMS helps to provide farmers with time to develop a recovery plan and improved understanding of their financial situations.
- Longer term program outcomes are uncertain.
Efficiency and effectiveness
- While FDMS continues to meet its service standards, the cost of service delivery is increasing. A determination of the relative efficiency of the Program cannot be reached in the absence of an appropriate comparator.
- The Program meets the needs of various types of farmers and can adapt to changes in the context in which farmers operate.
Recommendations
Recommendation 1: The Assistant Deputy Minister, Programs Branch, should assess whether the Farm Debt Mediation Service is still relevant, and whether it addresses and is responsive to a demonstrable need.
Recommendation 2:. The Assistant Deputy Minister, Programs Branch, should develop performance metrics to adequately assess the impact of the Farm Debt Mediation Service.
Management response
Management agrees with the evaluation recommendations and has developed an action plan to address them by April 2024.