The recently introduced Family Farmer Support Act 2019 (S.897) will help family farmers reorganize after facing difficult times, which more and more of them are experiencing due to the uncertainty of some export markets, lower prices for some farm and ranch products. and other factors.
Recognizing the unique challenges faced by family farmers, Congress in 1986 established Chapter 12 of the US Bankruptcy Code, which removes some costly reorganization requirements for large corporations.
“Our farmer members have experienced consecutive years of low commodity prices and the consequent low profitability and low farm incomes. As a result, farmers and ranchers are seeing their equity eroded as their debt ratio rises and debt financing hits a 30-year high. The double whammy of record farm debt and poor economic conditions has led many farmers to file for Chapter 12 bankruptcy as an option for debt relief and restructuring,” said Zippy Duvall, president of the American Farm Bureau Federation.
While Chapter 12 has helped many family farmers, its $4.1 million debt limit has kept many others from using it. The Family Farmer Assistance Act of 2019 would allow more family farmers to apply for relief under the program by raising the cap on Chapter 12 operating debt to $10 million.
‘Removing the liability cap and giving more farmers the opportunity to qualify for Chapter 12 bankruptcy provides the restructuring and seasonal repayment flexibility that many farmers need in today’s lagging farm economy’ today and will help align bankruptcy law with the scale and credit needs of American agriculture,” Duval said.
The bipartisan bill, backed by the Farm Bureau, was introduced by Sen. Chuck Grassley (R-Iowa) and co-sponsored by Sen. Amy Klobuchar (D-Minn.), Ron Johnson (R-Wis.), Patrick Leahy (D-Vt.), Thom Tillis (RN.C.), Doug Jones (D-Ala.), Joni Ernst (R-Iowa) and Tina Smith (D-Minn.).