AgDM newsletter article, February 1999

Negotiating with creditors

by John Baker, attorney at law for the Iowa Concern Hotline, 1.800.447.1985,

Everyone in Iowa is now, or should be, aware of the financial difficulties many farmers are experiencing. The cause of the low prices have been discussed and debated by many and, regardless of the cause, the individual producer must deal with the effect.

Resolve conflict

During these periods of financial stress the relationship between the producer and the creditor is often, if not always, damaged.  In fact, a conflict may develop between the producer and the creditor. Remember, a conflict is not a mere disagreement. A conflict is characterized by tension, mistrust, poor communications, intense emotions, or unclear goals. However, conflict tends to polarize and paralyze the parties involved in the conflict.  Conflict is a normal part of human interactions and need not be harmful or destructive.

Negotiation is the process by which a conflict is resolved in a mutually agreeable manner.

However, how you react to conflict is the most important consideration.  In order to resolve any conflict, the parties involved must come to some mutually agreeable solution. Negotiation is the process by which a conflict is resolved in a mutually agreeable manner.

Negotiate a solution

When negotiating with a creditor, or with anyone for that matter, there are several actions that can be taken to enhance the possibility of a favorable outcome.

Be flexible

Be flexible in your approach to finding a solution – you may have to compromise. Remember to respond to the other party in a manner that will move the negotiations toward a solution that meets your goals.  Learn to use the word and when you reply to proposals.  If you use the word but you give a double message. For example, if you say, “You have a good idea, but there are some things wrong with it,” you are really saying that it is not a good idea. However, if you say, “You have a good idea and there are some ways to improve on it,” you indicate cooperation and agreement.

Finally, sometimes we reach an impasse in negotiations. Neither the farmer nor the creditor can change their position. If this happens, agree to disagree and don’t be disagreeable. If impasse is the answer, end the negotiations and find additional assistance.


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