08/05/2019 | Press release | Distributed by Public on 08/05/2019 12:07
Bill heads to the President for his signature
As bankruptcy rates among American farmers reach near record highs, The Family Farmer Relief Act would raise the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program
WASHINGTON-U.S. Senators Amy Klobuchar (D-MN), Chuck Grassley (R-IA), and Tina Smith (D-MN) announced that their bipartisan legislation to help farmers keep their farms, reorganize their businesses, and repay their debts has passed the Senate and is headed to the President's desk to be signed into law. As bankruptcy rates among American farmers near record highs, the Family Farmer Relief Act would raise the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program.
'The passage of this bipartisan, commonsense legislation means that struggling farming families will have a fighting chance to keep their farms, reorganize their businesses, and repay their debts,' Klobuchar said. 'Family farmers are essential to the fabric of local communities across the country. But changes in the farm economy have put small family farms under increasing financial pressure, and they need bankruptcy laws that are up to date. The bankruptcy reforms passed in this legislation aren't just good for farmers, they are good for small towns and rural areas throughout our country.'
'For family farms whose assets are largely tied up in land and essential equipment, reorganizing debts can be particularly challenging when falling on hard times. As low commodity prices force farmers to take on more debt, this bill guarantees a safety net is in place for more farmers who need help getting back on their feet. By providing relief to these small-to-mid-size farms, we can ensure more successful reorganizations, which will be beneficial for everyone involved in the supply chain, while avoiding mass liquidations and further consolidation in the largest sectors of the industry,' Grassley said.
'It's been a challenging time for our farmers and ranchers and it is important that we do our part to ensure that family farms can get back on their feet during stressful financial situations,' Smith said. 'This bill will ultimately help family farms avoid extremely difficult bankruptcy proceedings, giving them a better chance at reorganizing and restructuring to get back on their feet.'
Several years of low commodity prices, stringent farm lending regulations and recent retaliatory tariffs have taken a toll on America's agriculture producers. Farm bankruptcy rates in many farming regions across the country are at their highest point in a decade. In some places in 2018, farm bankruptcies doubled from the previous year. Debts held by farmers are nearing historic levels set in the 1980s, further financially extending farm operations.
Recognizing the unique challenges that family farmers and fishers face, Congress established Chapter 12 of the U.S. bankruptcy code, which removes certain costly reorganization requirements intended for large corporations. The Family Farmer Relief Act raises the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program. This reform will help ensure that the bankruptcy laws are up to date and protect family farmers so that they can keep farming and contributing to their local communities.
The Family Farmer Relief Act of 2019 is supported by the National Farm Bureau.