March 27, 2019
WASHINGTON – Senator Doug Jones (D-Ala.) has introduced the bipartisan Family Farmer Relief Act of 2019 to help family farms reorganize after falling on hard times as bankruptcy rates among American farmers near record highs.
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 of 2019 raises the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program.
“Our farmers are struggling with a debt crisis the likes of which we haven’t seen in almost 40 years, and that’s why I support expanding access to Chapter 12 bankruptcy,” said Senator Jones. “We need to do everything we can to help Alabama farmers succeed, especially at a time when the business of farming is becoming increasingly difficult.”
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 previous years. Debts held by farmers are nearing historic levels set in the 1980s, further financially extending farm operations.
The Family Farmer Relief Act of 2019 is supported by the National Farm Bureau.
“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. The double-whammy of nominal record farm debt and poor economic conditions have led many farmers to seek Chapter 12 bankruptcy as a debt relief and restructuring option. Lifting the liability cap and giving more farmers an opportunity to qualify for Chapter 12 bankruptcy provides the restructuring and seasonal repayment flexibility that many farmers need in today’s lagging farm economy and will help to align bankruptcy law with the scale and credit needs of U.S. agriculture,” said Zippy Duvall, President of American Farm Bureau Federation.
The Family Farmer Relief Act of 2019 is co-sponsored by Senators Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.), Ron Johnson (R-Wisc.), Patrick Leahy (D-Vt.), Thom Tillis (R-N.C.), Joni Ernst (R-Iowa) and Tina Smith (D-Minn.)
Bill text of the Family Farmer Relief Act of 2019 is available here.