The United States Department of Agriculture is currently projecting farm income to reach $88 billion in 2019. However, the American Farm Bureau Federation said in a new report that $33 billion, or almost 40%, of that income will come in the form of federal disaster assistance, trade aid, the farm bill and insurance indemnities.
The aid has been promised, but the report says farmers have yet to receive a large portion of the assistance package, which has resulted in record high farm debt. By the end of the year, that debt is expected to reach a record $416 billion.
More and more farmers are filing for Chapter 12 bankruptcy, a code designed specifically for family farmers with a regular annual income, to create a repayment plan to their creditors over three to five years.
Data from the U.S. Courts, over a 12-month period ending in September 2019, Chapter 12 bankruptcy fillings have gone up 24% compared to last year. States like Wisconsin, Georgia, Kansas and Nebraska saw the most chapter 12 bankruptcy filings in the country.
The report attributes the increased bankruptcies to the tariffs on U.S. agriculture, downturn in the farm economy and adverse planting, growing and harvesting conditions. .
More farmers are extending repayment terms, and chapter 12 bankruptcies are expected to remain elevated.