Sept. 2, 2020
Facing Farm Financial Stress: Bulletin series shows life cycle of a farm bankruptcy
By Sarah Cato
U of A System Division of Agriculture
- Farm bankruptcies increased by 23 percent from March 2019 to March 2020
- Bulletin series from NALC designed to help farm families understand each phase of the bankruptcy process
- Series can be found at https://bit.ly/30NXsvw
(Download this story MS Word format here.)
FAYETTEVILLE, Ark. – Unforgiving weather patterns, trade disputes and low commodity prices have become the perfect storm for financial distress in the agricultural community, with family farm bankruptcies rising 23 percent for the 12-month period from March 2019 to March 2020, compared with the previous 12 months.
The deeper story is that the annual rate is merely the most recent of five consecutive years of high Chapter 12 filings. According to a report released this year by the American Farm Bureau, the 627 Chapter 12 filings in the 12 months ending March 2020 account for the third-highest total over the last 20 years. Only 2011 and 2003 saw a higher number.
“A farming or fishing family can face rising debt for a number of reasons,” said Peggy Hall, associate professor and director of the Agricultural and Resource Law Program at Ohio State University. “Uncontrollable factors like down markets, weather impacts, a death in the family, medical issues, and a host of unforeseen circumstances could be factors.”
In an effort to help farm families fully understand the bankruptcy option, the National Agricultural Law Center has published a bulletin series authored in partnership with Hall and her colleagues at Ohio State University Extension.
The series, titled “Facing Farm Financial Stress: An Overview of the Bankruptcy Option,” walks producers through each stage of the bankruptcy process. From first considerations, to court preparation, to recovery, the series takes a look at the entire life-cycle of a farm bankruptcy.
“It’s important to note that the 2019-2020 figures are pre-pandemic,” Harrison Pittman, director of the National Agricultural Law Center, said. “There’s little doubt that economic disruptions from COVID-19 will not help farmers already in a struggle for their lives.
“This resource will be helpful to the many farm families who have been struggling and are reviewing their options,” he said. “By covering each step of the process, this publication will help producers decide if the bankruptcy option is the right fit for their situation.”
The series can be found at https://bit.ly/30NXsvw.
About the National Agricultural Law Center
The National Agricultural Law Center serves as the nation’s leading source of agricultural and food law research and information. The Center works with producers, state and federal policymakers, Congressional staffers, attorneys, land grant universities, and many others to provide objective, nonpartisan agricultural and food law research and information to the nation’s agricultural community.
The Center is a unit of the University of Arkansas System Division of Agriculture and works in close partnership with the USDA Agricultural Research Service, National Agricultural Library.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.
The University of Arkansas System Division of Agriculture is an equal opportunity/equal access/affirmative action institution. If you require a reasonable accommodation to participate or need materials in another format, please contact 479-575-4607 as soon as possible. Dial 711 for Arkansas Relay.
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Media Contact: Sarah Cato
National Agricultural Law Center
University of Arkansas System Division of Agriculture