Is There a Light in the Farm Economy?

By Mark Harring, Standing Chapter 12 and 13 Trustee for the Western District of Wisconsin (Madison, WI)

Since 2013, net farm income, a broad measure of farm profitability, has declined by 52%, and in 2018 is projected to be at a 12 year low.1

According to the USDA, farmers are facing unrivaled income volatility, coming off high commodity prices five years ago. Roger Johnson, president of the National Farmers Union said, “the prices that farmers have been receiving for their products aren’t paying the bills, and too many people are being forced to give up farming”2.

It is no wonder, given the above financial pressure, that the Centers for Disease Control and Prevention reports that farmers as a group have a higher suicide rate than any other occupation. Its twice as high as that of military veterans.3

During 2017, the United States Courts shows 501 Chapter 12 Bankruptcy filings – the highest level since 2012. Chapter 12 bankruptcies are designed for “family farmers” and “family fishermen” with regular annual income4. For the first quarter of this year, the Federal Courts system shows Chapter 12 filings of 116. Last year it was 117. Virtually the same.

While bankruptcy can offer a fresh start, the ability to reorganize operations, and restructure debt, the underlying economics need to change.

Earlier this July United States Senator Ron Johnson ripped the Trump administration‘s plan to provide $12 billion in trade assistance to farmers hurt by tariffs, likening the measure to a Soviet-style economy.5

Trump’s latest Mexican trade deal may help the dairy industry but it is not clear how other sectors will fare. Nor is it clear what will happen to farm exports to Canada6.

A simple thing Congress can do now is to pass a fair Farm Bill. Last fall Congress passed 11 USC §1232 allowing governmental unsecured claims against the debtor or the estate to be discharged. This allows the fresh start promised under Chapter 12 to actually happen.

Another thing Congress should consider is to increase the Chapter 12 debt limits from $4.1 million7 to $6 or $10 million. It costs the taxpayer nothing and matches the reality of the extended family farm as we know it now.

If you are interested in Chapter 12 and helping the family farmer, there will be a conference July 15 and 16, 2019 in Indianapolis. The agenda is currently being formulated but it promises to cover a wide range of farm reorganization topics. More information will be available at http://www.act12.org/ early next year.

_________________________

[1] John Newton, Director of Market Intelligence for AFBF in Wisconsin State Farmer May 18, 2018

[2] Rick Barrett, Milwaukee Journal Sentinel

[3] Suicide, Agriview, March 29, 2018

[4] 11 USC §101 (18) thru (21)

[5] Bill Glauber, Milwaukee Journal Sentinel, Wisconsin State Farmer July 27, 2018

[6] Rick Barnett, Wisconsin State Farmer, August 31, 2018

[7] 11 USC § 101 18(B)(ii)

_________________________

harring Mark Harring is the Standing Chapter 12 and 13 Trustee for the Western District of Wisconsin. He is a graduate of the University of Wisconsin Madison. Trustee Harring has over thirty years of bankruptcy, trust, and management experience. He was previously the Director of Operations for Standing Trustee William Chatterton and helped that trustee move from paper records to state-of-the-art computer systems. Prior fiduciary and banking experience includes managing an internal audit division for what is now Great Lakes student loan servicing corporation. Mr. Harring has over fifteen years’ experience as owner operator of cattle and grain farms in southern Wisconsin. As such, Trustee Harring is one of the few Chapter 12 Trustees in the country with firsthand farm experience. Mr. Harring has received national awards and recognition as a director and board member of a local branch of an emergency medical organization. He currently serves that national organization as a regional advisor. Trustee Harring is member of the National Association of Chapter Thirteen Trustees and serves as the chair of their website committee. He further serves as the president of the Association of Chapter 12 Trustees and as a member of their conference planning committee.

No Author Biography has been linked to this Article.

Related Articles

January 12, 2020
By David Cox,1 Cox Law Group, PLLC (Lynchburg, VA) Click here for Part 1 of 3 C. Determining whether to file. Collection considerations outside of bankruptcy. Is the debtor judgment-proof? Are assets and income exempt? How active are creditors? Is the current situation likely to change? Has there been a previous filing, and if so, are there stay or exhausted...
Members
Relyea
July 10, 2022
For many of the consumer debtors my firm represents, the primary purpose of filing bankruptcy is to save their home or other real estate from being foreclosed upon by their mortgage servicer. We help those debtors file and comply with chapter 13 plans that propose to resolve their defaulted mortgages in a variety of ways, which might include curing pre-petition...
Members
May 12, 2019
By Judge Michael A. Fagone & Career Law Clerk Ciera S. Dye III. Policy Considerations Where the statute does not provide definitive guidance, courts often turn to policy considerations. How do those considerations weigh out here? One answer is that policy considerations cut against imposing any sort of requirement of preapproval for postpetition borrowing by a consumer debtor. Several reasons...
Members
April 26, 2020
(Items in italics have been added by Academy staff) . . . will be held virtually by ZOOM . . . Please visit our website at ch13pitt.com (this site has very detailed directions) for all of the details and instructions. A computer is not a necessity since ZOOM also allows participation by telephone (iphone, Android). Please visit the website before...
William-1_print_2019
On February 22, the Supreme Court issued its opinion in Bartenwerfer v. Buckley, 598 U.S. _____, 2023 WL 2023 WL 2144417 (Feb. 22, 2023), affirming the Ninth Circuit’s decision and resolving “confusion in the lower courts on the meaning of § 523(a)(2)(A).”1 Two Justices joined the opinion with the understanding that the Court was only addressing fraud in the context...
Members
February 17, 2019
Offering time-saving alternatives to a telephone call, the IRS reminds taxpayers they can get fast answers to their refund questions by using the “Where’s My Refund?” tool available on IRS.gov and through the IRS2Go app. The IRS issues nine out of 10 refunds in less than 21 days, and the fastest way to get a refund is to use IRS...
ahern_larry_regular
September 18, 2022
Appendix A 1994 Revised Text of 11 U.S.C. § 330(a), with 2005's Minor Changes Highlighted(1994 version highlighted to show additions and deletions in 2005) (a)(1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a trustee, a consumer privacy ombudsman appointed...
Members
August 15, 2021
By Nancy B. Rapoport, Garman Turner Gordon Professor of Law, Boyd School of Law, and Affiliate Professor of Business Law & Ethics, Lee Business School, William S. Boyd School of Law, University of Nevada, Las Vegas Dear Readers: My guardian angel, Regina Logsdon has asked a great question:what should you do when your “Spidey sense” tells you that your client...
Members
gustafson2
Judge Gustafson and Daniel Tavera explore “Who Benefits” from work done in a Chapter 13 case, and they suggest that the title of this piece comes from an old-time radio show – “Yours Truly, Johnny Dollar” – one of the most popular radio shows in its day. It was a five-part show called “The Cui Bono Matter.” To hear a...
Members
August 23, 2020
By Cathy Moran, Esq. (Redwood City, CA) It started as a means test question: could emergency medical expenses be deemed non consumer debt. It ended up as a step back to get the bigger picture. Well-seasoned bankruptcy counsel brought the fact pattern to a list serve of colleagues. The prospective debtors’ income in a small consulting corporation is declining, his...
Members

Looking to Become a Member?

ConsiderChapter13.org offers a forum to advance continuing education of consumer bankruptcy via access to insightful articles, informative webinars, and the latest industry news. Join now to benefit from expert resources and stay informed.

Webinars

These informative sessions are led by industry experts and cover a range of consumer bankruptcy topics.

Member Articles

Written by industry experts, these articles provide in-depth analysis and practical guidance on consumer bankruptcy topics.

Industry News

The Academy is the go-to source for the latest news and analysis in the Chapter 13 bankruptcy industry.

To get started, please let us know which of these best fits your current position: