The number of farmers struggling to make ends meet has steadily increased in 2019. This is beginning to bleed over into the year 2020. There were a total of 595 chapter Chapter 12 bankruptcies in 2019 alone, up 20% from the previous year 2018.
Chapter 12 is a relatively new edition to more recent form of the list of current bankruptcy laws in our nation that helps prevent foreclosure or liquidation of assets.
The U.S. Courts website states that, “Chapter 12 is designed for ‘family farmers’ or ‘family fishermen’ with ‘regular annual income.’ It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.”
“Under Chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years,” the website further states.
Per the U.S. Farm Income Outlook: August 2019 Forecast, “Since 2008, U.S. agricultural exports have accounted for a 20% share of U.S. farm and manufactured or processed agricultural sales.”
In 2018, total agricultural exports were estimated up 2% at $143.4 billion, which was actually an increase of 2%.
The finances of many farmers have been eroded, and credit lines have been declined by banks due to future economic uncertainty.
The collective debt of U.S. farmers rose from $410 billion to $415 billion according to the American Farm Bureau Federation.
Trade tensions are among the growing challenges the farming sector has faced.
Issues dealing with low commodity and, as well as severe weather are also among them and low commodity prices.
President Donald Trump ramped up a nearly a $28 billion subsidy program to further aid and stop the pain of farmers around the country.
Despite the rough patches, some farmers are beginning to have hope after the president signed a revised NAFTA deal on Jan. 29. and Chinese assurance of ed increased purchasing of food products from the United States.
Many farmers largely view the trade disruption as short-term pain for long-term gain.
One good sign for many was seen when China agreed to buy as much as $36 billion in agricultural exports in 2020, the most ever in a one year. This promise comes without a specific timetable.
However, crop prices have dropped since the signing of trade deals.
In the futures market, many of the top exporting commodities of the United States like soybeans, corn and wheat have dropped. The worst was soybeans which fell over more than 7%.
This is likely due to stoked demand due to the spread of the coronavirus which is already having widespread global implications in many facets of life.
