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All signs pointed to a difficult year for farms in 2019.
New data confirms it.
The number of family farms filing for Chapter 12 bankruptcy last year spiked 20 percent nationally, according to a study by the American Farm Bureau Federation. That’s the highest increase since 2010, the year after the Great Recession ended.
In the Southeast, it swelled 48 percent from 2018.
The jump “was not unanticipated given the multi-year downturn in the farm economy, record farm debt, headwinds on the trade front and recent changes to the bankruptcy rules,” the Farm Bureau said.
Still, it was a hit for the Carolinas.
The $87 billion agriculture industry plays a crucial rule in North Carolina’s economy, according to N.C. State University. It employs 17 percent of the state’s workforce.
In 2015, South Carolina’s government found agriculture and forestry had a $41.7 billion impact statewide and supported 212,000 jobs.
Both saw a significant jump in bankruptcy filings last year.
According to the Farm Bureau, there were 16 filings in North Carolina in 2019 — a 33 percent jump from 2018 — and 10 in South Carolina, more than three times higher than the 2018 total.
That’s the highest level it’s been in a decade in the Palmetto state, the Farm Bureau said.
In the Southeast, only Georgia and Florida had more filings in 2019.
Forty-one farms in Georgia filed for bankruptcy, the second highest total in the country behind Wisconsin. It was also the highest year over year increase nationally. Florida had 18 farms file for bankruptcy, according to the report.
The Farm Bureau, an independent organization advocating for farms across the country, composed the report using data released by the U.S. Courts with the help of an economist.
Nationally, the organization painted a disjointed picture.
A total of 595 Chapter 12 bankruptcies were filed across the United States — “up nearly 100 filings from 2018 and the highest level since 2011’s 637 Chapter 12 filings,” according to the Farm Bureau.
Some regions, such as the Northeast and Southwest, saw a drop in filings from 2018. Others had only slight increases.
In the past 10 years, Georgia reportedly had the third highest number of filings — 351. Only California and Wisconsin had more.
“Over the last decade, there have been more than 5,000 Chapter 12 farm bankruptcies across the U.S., representing approximately a quarter of 1% of all farm operations during this time period,” the Farm Bureau said.
Income from farming in 2019 didn’t take as much of a hit — thanks in part to the Trump administration, according to the Farm Bureau.
“Net farm income in 2019 is slightly above the 20-year average but was supported in large part by the Trump administration’s efforts to financially shield farmers from unfair retaliatory tariffs,” the Farm Bureau said.
Without that shield, the organization said economists found income would have dropped to the second lowest in a decade.
“The corollary to this is that farm bankruptcies could have been worse considering the record-high farm debt of $415 billion (in nominal terms) and the likely difficulties servicing this debt without the revenue from the Market Facilitation Program,” according to the Farm Bureau.
https://www.newsobserver.com/news/state/north-carolina/article239844163.html?fbclid=IwAR39NlkUTFoLdB8D9jWvU9c4FAqgeLYrFmou1taOeEPZeGRdNU4xTUAmwwo
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