Capital Region Not Part Of National Uptick In Farm Bankruptcy Filings

By Holly Duchmann

Baton Rouge Business Report

While the number of U.S. farmers filing for chapter 12 bankruptcy protection in the 12-month period ending June 30 rose by 8%, data shows Capital Region farmers were not among them. 

Designed for family farmers and fishers with debts of less than $10 million, chapter 12 bankruptcy protection allows distressed farmers to carry out a plan to repay creditors over three to five years. 

Farmers were already in a tight spot before the pandemic due to a global grain glut, foreign competition pushing down prices and trade disputes with China, the impacts of which were especially felt by Louisiana soybean farmers. Then, with the arrival of COVID-19 in the U.S., the country’s food supply chain was disrupted by restaurant dining room closures, declining restaurant sales and closures of production facilities from virus outbreaks. 

While there were a dozen chapter 12 bankruptcies filed in Louisiana over the 12-month period, according to federal data, none involved farms in the Capital Region. Most of the bankruptcies were filed by central and north Louisiana farms, with the most—nine—filed in Franklin Parish. A representative with the state’s Department of Agriculture and Forestry could not be reached for more information before this afternoon’s deadline. 

Nationwide, some 580 farmers filed for bankruptcy protection, according to federal data, 8% more than the year prior. Despite the uptick in filings, agricultural economists and attorneys say that bankruptcies actually slowed slightly in the first half of this year partly because of an infusion of federal aid and challenges to filing during the pandemic, the Wall Street Journal reports. However, depending on the amount of pandemic aid that’s passed on to farmers, those figures could rise in the second half of the year. 

The Trump administration is expected to dole out a record $33 billion in payments to farmers this year, according to the University of Missouri’s Food and Agricultural Policy Research Institute. And if more aid isn’t extended, farm income is expected to fall 12% to $79.4 billion in 2021, according to the Food and Agricultural Policy Research Institute. 

Possible assistance could come from Congress, which is debating further financial support for farmers, and from the USDA, which could offer more aid from billions earmarked earlier this year to replenish the government’s funding mechanism for agriculture, the Commodity Credit Corp.