Farm Loan Delinquencies And Bankruptcies Continue To Rise

Following years of low farm income, bankruptcies are on the rise.  The American Farm Bureau Federation said delinquency rates are above the historical average and trending in the wrong direction.  The AFBF’s Allison Wilton, says the number of Chapter 12 bankruptcies has increased steadily.

“Since June 2018, there were a total of 535 Chapter 12 bankruptcy filings. This is an increase of 13%. States in Midwest such as Kansas, Minnesota and Wisconsin had the highest number of filings and the Midwest overall had a total of 240 filings, the highest in the nation.”

Wilton said the depressed farm economy is driving the uptick in bankruptcy filings.

“The deteriorating financial conditions for farmers and ranchers are the direct result of several years of low farm income, a low return on farm assets, mounting debt, more natural disasters, and the second year of retaliatory tariffs on many U.S. agricultural products.”

Currently, Chapter 12 bankruptcies are capped by a $4.1 million debt limit, which Wilton says prevents many family farmers from filing.  However, Congress passed legislation to increase the cap, up to $10 million.

If you have a story idea for the Washington Ag Network, call (509) 547-1618, or e-mail gvaagen@cherrycreekradio.com