The number of farm bankruptcies in the United States grew by 20 percent in 2019, according to data released by the U.S. courts. The data refers to Chapter 12 bankruptcies which are part of the federal bankruptcy code that’s designed to allow family farmers and fishermen to restructure their finances and avoid liquidation or foreclosure. 595 such bankruptcies were filed in 2019, an increase on the 498 filed in 2018.
The number of Chapter 12 bankruptcies has now hit an eight-year high. The increase was expected despite the government providing farmers with a $28 billion bailout, twice as much as the 2009 bailout of Detroit’s Big Three automobile producers. While the aid package has provided relief, many farmers are continuing to struggle due to the trade war with China which has cut them off from one of their biggest markets.
The agricultural sector is also experiencing higher levels of farm debt, low commodity prices and increasingly volatile weather condictions. The Department of Agriculture has stated that close to a third of projected net farm income in 2019 came from government aid and taxpayer subsidized insurance payments. Wisconsin was the state with the most farm bankruptcies in 2019 – 57 – its highest total in more than a decade.
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