Trade wars, climate change plunge the family farm into crisis. Is it an endangered American institution?
· Farm bankruptcies through September surged 24% versus the prior year, to 580, amid a perfect storm created by Donald Trump’s trade war with China and Europe, slumping commodity prices, and a year of unfavorable weather.
· The report showed bankruptcy filings at their highest in the state of Wisconsin with 48 filings, followed by 37 filings in Georgia, Nebraska, and Kansas.
· The spillover effect: suicide rates among farmers rise and many rural towns dependent on agriculture become ghost towns.
· President Trump has already earmarked $28 billion in financial assistance for farmers whose sales to China have been crippled or blocked.
Tom Connor, special to CNBC.com
Nov 2, 2019
Farm bankruptcies in September surged 24% amid a perfect storm created by President Donald Trump’s trade war with China and Europe, slumping commodity prices, and a year of unfavorable weather. This August, the USDA reported that more than 19.4 million acres of farmland nationwide weren’t planted due to record spring rains and historic, catastrophic flooding.
According to a report released Wednesday by the American Farm Bureau Federation, the nation’s largest general farm organization, U.S. farmers increasingly depend on trade aid and other federal programs for income. Record-high debt and a rise in Chapter 12 farm bankruptcies should come as no surprise, the Farm Bureau reported.
“Data from the U.S. Courts reveals that for the 12-month period ending September 2019, Chapter 12 farm bankruptcies totaled 580 filings, up 24% from the prior year and the highest level since 676 filings in 2011,” it said.
The figures also highlight the importance of a “phase one” deal the administration is currently negotiating with Beijing to increase agriculture imports in return for a pause in escalating U.S. levies. China said on Friday it has reached a consensus in principle with the U.S. during trade talks this week.
The report showed bankruptcy filings at their highest in the state of Wisconsin with 48 filings, followed by 37 filings in Georgia, Nebraska, and Kansas.
Nine other states experienced Chapter 12 bankruptcy filings at or above 10-year highs.
As early as February of this year, U.S. Agriculture Secretary Sonny Perdue acknowledged that farm debt rivaled that of the ’80s, a problem compounded by a loss of China and other export markets due to President Trump’s trade disputes.
The effect of the trade war has been acute. Over the first eight months of 2019, Chinese importers purchased about $8 billion of U.S. agricultural goods, far below the $19.5 billion total for 2017 before the trade battle broke out, the U.S. Department of Agriculture reports.
President Trump has already earmarked $28 billion in financial assistance for farmers whose sales to China have been crippled or blocked. On August 23, he signed into law the Family Farmer Relief Act of 2019, which increases the debt limit for family farmers seeking to reorganize under Chapter 12 bankruptcy to $10 million from an adjusted $4.4 million.
But neither those payments nor the farm bill being hammered out in Congress will substantially change the outlook for farm country. Ever since federal farm policy told farmers to “get big or get out” in the ’70s, the push toward consolidation has created decades of slow-burning crisis for many farmers. The problem has some rural residents re-envisioning rural policy from the ground up.
Problems for farmers are compounded by a six-year slump in crop and livestock prices, according to Farm Aid...
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