Farm Bureau & Farmers Union Unite on Bankruptcy Bill
"Our farmer members have experienced several consecutive years of weak commodity prices and the low profitability and poor farm income that follow. As a result, farmers and ranchers are watching their equity erode as their debt-to-asset ratios climb and debt financing reaches a 30-year high," AFBF President Zippy Duvall and NFU President Roger Johnson wrote in the letter.
The tremendous challenge of record nominal farm debt and poor economic conditions has led many farmers to seek Chapter 12 bankruptcy as a debt relief and restructuring option. In the Midwest alone, Chapter 12 farm bankruptcies were at the highest level in over a decade. Though Chapter 12 has been a help to many family farmers, its $4.1 million debt limit kept many more from using it.
"Lifting the liability cap will expand access to the restructuring and seasonal repayment flexibility that many farmers need in today's lagging farm economy, which is being further affected by trade disputes, projections for below average farm income over the next decade and rising interest rates," Duvall and Johnson said, encouraging lawmakers to cosponsor the legislation and pledging to work with them for quick passage.