The U.S. Congress last week passed legislation aimed at increasing the debt cap covered by a farmer facing bankruptcy.
The Family Farmer Relief Act boosts protection from $4.1 million to $10
million, reflecting a change in land values and the increasing size of U.S. farms. It offers farmers more protection in Chapter 12 bankruptcy, which enables them to restructure finances without having to liquidate or foreclose on the farm.
The bill now awaits the president’s signature.
U.S. farm debt now totals more than $400 billion, the highest level since the
1980s farm crisis, and bankruptcies are on the rise.
Through June 2019, and over the prior 12 months, there were a total of 535
Chapter 12 bankruptcy filings, an increase of 13 percent.
Wisconsin, Kansas and Minnesota led the nation in Chapter 12 filings; bankruptcy filings in Kansas and Minnesota in the past year have risen to the highest levels of the past decade.
The delinquency rates for commercial agricultural loans in both the real estate and non-real estate lending sectors are at a six-year high, according to the Federal Deposit Insurance Corporation.
Sources: whotv.com, American Farm Bureau Federation