According to federal court data, farm bankruptcy rates jumped by 20% in 2019. In the past decade, that spike trails only 2010, the year following the Great Recession, when Chapter 12 bankruptcies rose 33%.
Chapter 12 of the U.S. bankruptcy code is only available to farmers and fishermen. But filing for bankruptcy doesn’t necessarily mean you’re giving up on farming.
“The big reason you file for Chapter 12 is because your debts outstripped your current assets ,and that usually happens when it’s your land values,” said Robert Dinterman, an agricultural economist at The Ohio State University.
Eighty percent of farm assets are tied up in land values and those values have been declining for the past few years thanks to falling commodities prices and trade wars.
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