U.S. Farm Bankruptcies Hit an Eight-year High

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U.S. Farm Bankruptcies Hit an Eight-year High
By: P.J. Huffstutter, Reuters
30 January 2020
 

CHICAGO—U.S. farm bankruptcy rates jumped 20% in 2019 - to an eight-year high - as financial woes in the U.S. agricultural economy continued, in spite of massive federal bail-out funding, according to federal court data.

According to data released this week by the United States Courts, family farmers filed 595 Chapter 12 bankruptcies in 2019, up from 498 filings a year earlier. The data also shows that such filings - known as “family farmer” bankruptcies - have steadily increased every year for the past five years.

Farmers across the nation also have retired or sold their farms because of the financial strains, changing the face of Midwestern towns and concentrating the business in fewer hands.

“I just had a farmer contact me last week, telling me he can’t get financing for his inputs this year and he doesn’t know what to do,” said Charles E. Covey, a bankruptcy attorney based in Peoria, Illinois.

Chapter 12 is a part of the federal bankruptcy code that is designed for family farmers and fishermen to restructure their debts. It was created during the 1980s farm crisis as a simple court procedure to let family farmers keep operating, while working out a plan to repay lenders.

The increase in cases had been somewhat expected, bankruptcy experts and agricultural economists said, as farmers face trade battles, ever-mounting farm debt, prolonged low commodity prices, volatile weather patterns and a fatal pig disease that has decimated China’s herd.

Even billions of dollars spent over the past two years in government agricultural assistance has not stemmed the bleeding.

Nearly one-third of projected U.S. net farm income in 2019 came from government aid and taxpayer-subsidized commodity insurance payments, according to the U.S. Department of Agriculture.

Original article

Photo on front page: A small rural farm is seen in a field of snow near Nevada, Iowa, U.S., 28 January 2020. Source: Mike Segar/Reuters. Graphic on this page: Map showing U.S. Chapter 12 farm bankruptcies in 2019. Source: Farm Bureau.

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