U.S. Farm Bankruptcy Filings Up 24% Over the Last Year
Nov. 2, 2019 (EIRNS)—The number of filings for bankruptcy by U.S. farmers has gone up 24% from September 2018 to September 2019, reported the American Farm Bureau Federation on Nov. 1. This refers to Chapter 12, a section of the Federal code adapted in the 1980s, to allow farmers to continue in operation, while reorganizing debt. John Newton, the Farm Bureau’s chief economist, expressing his concern, pointed to the many factors contributing to this worsening bankruptcy rate. Farmers have been receiving low prices for five years; and the 2019 growing season was a disaster for many commodities, given that the historic spring floods delayed or prevented planting. Since then, other weather conditions have worsened conditions, including an early frost in some locations.
Total farm debt is rising, according to the Agriculture Department, and is in the range of a record $416 billion. Of the expected total farm income this year of $33 billion, 40% of that is from Federal aid, advanced through the Commodity Credit Corp. mechanism, to buffer the loss of purchases by China.