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Washington Works to Stave Off Farm Bankruptcies

Written by Press Release

September 30, 2019

Our farmers are dealing with the perfect storm right now. Commodity prices are below the cost of production. Standoffs with critical trading partners have created additional uncertainty that has only compounded worries. A rainy fall and spring have hampered planting season and, in the case of Arkansas, produced one of the worst floods in our state’s history. Together, these troubles have left many of our family farmers and ranchers facing a dire economic outlook.

Arkansas farmers are far from alone. Conditions across the nation are equally challenging. Farm incomes in 2018 were down sharply again for the fifth consecutive year, total farm debt has climbed to levels not seen since the early 1980s and far too many family farms in our rural communities are barely hanging on or have already filed for bankruptcy.

Farming is a highly rewarding, but extremely stressful profession. As one can imagine, any vocation where many factors that impact your bottom line are out of your control makes for a challenging way of life. This is particularly true in recent years, where those dynamics seem to shift on a daily basis.

Just how bad is it out there in rural America? Federal Deposit Insurance Corporation (FDIC) data paints a bleak picture. Delinquency rates for commercial agricultural loans in both the real estate and non-real estate lending sectors are at a six-year high.

With these alarming numbers poised to rise higher, Congress has stepped up efforts to give family farmers additional protection in bankruptcy proceedings. We recently passed the Family Farmer Relief Act of 2019, a measure that raises the Chapter 12 debt limit to $10 million, and the president quickly signed it into law. This action will help create an extra layer of protections for struggling family farmers.

Washington is putting extra emphasis on programs to assist struggling farmers in an effort to stave off additional bankruptcies.

At President Trump’s request, the U.S. Department of Agriculture (USDA) is providing up to $16 billion in trade mitigation programs to support our farmers in an effort to help those impacted by China’s retaliatory actions. The bulk of the funds will be allocated in the form of payments to producers affected by China’s policy decisions, with the remainder going toward the purchase of surplus commodities affected by trade retaliation and toward the development of new export markets for American producers.

Additionally, USDA has approved disaster declarations for farmers, ranchers and others in the parts of rural America hit hardest by inclement weather and natural disasters. This includes the Arkansas counties hit hard by the historic flooding earlier this year.USDA’s Farm Service Agency (FSA), Natural Resources Conservation Service and Risk Management Agency offer programs that help producers recover losses, manage risk and rehabilitate farms and ranches. I encourage Arkansas agriculture producers who have suffered losses as a result to contact the local FSA office for assistance.

While these are all helpful efforts, Arkansans who make their livelihood in agriculture understand that increasing market access and improving existing trade deals are the best way to improve their long-term outlook. To that end, we are making progress. The president recently announced a new trade agreement with Japan that will expand access for U.S. agriculture exports. He and his team worked hard to get Canada and Mexico to the negotiating table to formalize a more mutually beneficial agreement that the Senate stands ready to finalize. My colleagues and I are committed to building on these positive developments toward a brighter future for America’s farmers and ranchers. 

Original article source: https://www.boozman.senate.gov/public/index.cfm/2019/9/washington-works-to-stave-off-farm-bankruptcies | Article may or may not reflect the views of KLEK 102.5 FM or The Voice of Arkansas Minority Advocacy Council

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