As bankruptcy rates among American farmers reach near record highs, The Family Farmer Relief Act raises the Chapter 12 operating debt cap to $10 million, helping more family farmers keep their farms
WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) announced that their bipartisan legislation to help farmers keep their farms, reorganize their businesses, and repay their debts has been signed into law. As bankruptcy rates among American farmers near record highs, the Family Farmer Relief Act raises the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program.
“Now that this commonsense legislation has been signed into law, struggling farming families will have a fighting chance to keep their farms, reorganize their businesses, and repay their debts,” Klobuchar said. “Family farmers are essential to the fabric of local communities across the country. But changes in the farm economy have put small family farms under increasing financial pressure, and they need bankruptcy laws that are up to date. The bankruptcy reforms in this legislation aren’t just good for farmers, they are good for small towns and rural areas throughout our country.”
“More than 30 years ago, Congress created tools to help family farmers reorganize their debts and get back on their feet. Since then, the price of farmland has increased dramatically, forcing small farmers to take on more debt. Low commodity prices have pushed farm debts even higher. The Family Farmer Relief Act recognizes these realities and adjusts the law accordingly. It’s a simple one-sentence bill, but it can make a world of difference for American farm families. I applaud President Trump’s action to expand these safeguards for America’s farmers,” Grassley said.
The Family Farmer Relief Act of 2019 is supported by the American Farm Bureau Federation.
“Farm Bureau is appreciative that the Family Farmer Relief Act of 2019 is now law. This law relieves some of the uncertainty farmers are facing due to export market disruptions, weather events and declining farm income. It will help family farmers reorganize after falling on hard times by increasing the debt limit for relief eligibility under the Chapter 12 bankruptcy code,” American Farm Bureau Federation President Zippy Duvall said.
Several years of low commodity prices, stringent farm lending regulations and recent retaliatory tariffs have taken a toll on America’s agriculture producers. Farm bankruptcy rates in many farming regions across the country are at their highest point in a decade. In some places in 2018, farm bankruptcies doubled from the previous year. Debts held by farmers are nearing historic levels set in the 1980s, further financially extending farm operations.
Recognizing the unique challenges that family farmers and fishers face, Congress established Chapter 12 of the U.S. bankruptcy code, which removes certain costly reorganization requirements intended for large corporations. The Family Farmer Relief Act raises the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program. This reform will help ensure that the bankruptcy laws are up to date and protect family farmers so that they can keep farming and contributing to their local communities.