Lenders face a number of restrictions in the way they deal with primary producers, under the terms of a bill tabled in Parliament this week.Banking Amendment (Rural Finance Reform) Bill 2019 introduces a number of new protections for small primary producers with loans.The bill prohibits ADIs from including catch-all material adverse change clauses in their loan documents, except where it relates to fraud or criminal activityIt requires ADIs that conduct valuations of any loan security to provide a copy of valuation instructions and final valuation reports to the borrower. ADIs must not require the borrower to meet any part of the cost of a valuation.The rationale for the bill is that small primary production businesses make profits over a multi-year cycle rather than every season. Their ability to pay creditors or reduce their debt level is based on these cycles.The information memorandum accompanying the bill says: "Operating under such variable conditions places small primary production businesses at a distinct disadvantage in managing their credit arrangements with financial institutions."Additional protections are deemed prudent for loans to small primary production businesses."The loan threshold is A$5 million (which will be indexed to CPI)The bill requires ADIs to provide a one-page summary of the clauses that may trigger a non-monetary default. ADIs that conduct audits of a borrower's business must provide a copy of the report to the borrower. They must not require the borrower to meet any of the cost of the audit.ADIs must notify and request to meet with the borrower at least six months prior to the expiry of a term loan.ADIs are prohibited from unilaterally varying a term or a condition of the loan unless it has given six months' notice or the borrower has failed to comply with a term or condition of the loan.Borrowers must be given a minimum 90 days' notice if a loan is not being renewed.