On January 10, 2020, P,J, Huffstutter writes on Reuters:
U.S. farm bankruptcy rates jumped 20% in 2019 – to an eight-year high – as financial woes in the U.S. agricultural economy continued in spite of massive federal bail-out funding, according to federal court data.
According to data released this week by the United States Courts, family farmers filed 595 Chapter 12 bankruptcies in 2019, up from 498 filings a year earlier. The data also shows that such filings – known as “family farmer” bankruptcies – have steadily increased every year for the past five years.
Farmers across the nation also have retired or sold their farms because of the financial strains, changing the face of Midwestern towns and concentrating the business in fewer hands.
“I just had a farmer contact me last week, telling me he can’t get financing for his inputs this year and he doesn’t know what to do,” said Charles E. Covey, a bankruptcy attorney based in Peoria, Illinois.
Chapter 12 is a part of the federal bankruptcy code that is designed for family farmers and fishermen to restructure their debts. It was created during the 1980s farm crisis as a simple court procedure to let family farmers keep operating while working out a plan to repay lenders.
The increase in cases had been somewhat expected, bankruptcy experts and agricultural economists said, as farmers face trade battles, ever-mounting farm debt, prolonged low commodity prices, volatile weather patterns and a fatal pig disease that has decimated China’s herd.
Even billions of dollars spent over the past two years in government agricultural assistance has not stemmed the bleeding.
Nearly one-third of projected U.S. net farm income in 2019 came from government aid and taxpayer-subsidized commodity insurance payments, according to the U.S. Department of Agriculture.
The court data indicates those supports did help prevent a more serious economic fallout, said John Newton, chief economist for the American Farm Bureau Federation.
Some of the biggest bankruptcy rate increases were seen in regions, such as apple growers in the Pacific Northwest, that did not receive much or any of the latest round of trade aid from the Trump administration.
The bankruptcy data “signals that things have not turned around,” said John Newton, chief economist for the American Farm Bureau Federation. “We still have supply and demand uncertainty. If we see prolonged low prices, I wouldn’t expect this trend to slow down.”
Gary Reber Comments:
“Farmers across the nation also have retired or sold their farms because of the financial strains, changing the face of Midwestern towns and concentrating the business in fewer hands.”
Of course, the problem is large corporate faming is geared to growing food, not for Americans, but for world markets, with Communist China being one of the countries that were targeted for sales.
Over the years since 1862, wealthy capital asset owners have purchased small farms and accumulated hundreds of millions of acres to dominate portions of the American farming sector. Those farms that are truly family owned typically sell their product to nearby markets or across states or to the large corporate conglomerates. Individual farms range in size from 230 acres to 2,100 acres. While most farms are not incorporated and are small acre-sized, about 5 percent are classified as corporate farms. These include family corporations with 10 or fewer stock owners (4.51 percent) and non-family farm corporations (0.55 percent).
With their backbreaking labor, farmers settled the expanding West through the 1862 Homestead Act. Farmers, riding the wave of manifest destiny, one major contributors to the building of the United States. Today, they continue to feed it.
No longer can someone pick up a pitchfork or guide a horse and plow and become a farmer. According to reports, farmland can cost an average of $4,000 per acre in the United States, and most farms have roughly 1,100 acres. Some of the biggest crops, such as corn and alfalfa, aren’t even grown to feed people. Thanks to globalization, food grown in the Midwest might end up feeding someone half a world away.
We should be looking to focus on the American market and retaining American ownership of our farm lands, and not allow foreign buyers to eliminate American farmer ownership and own and operate American farms themselves, as well as the livestock barns and slaughterhouses. We should be branded crazy if we allow this to transpire.
On a larger scale, we can the idea behind the 1862 Homestead Act to focus on universally creating ownership stakes for EVERY child, woman, and man in not land, but in the non-human factor of production––physical capital (productive land; structures; infrastructure; tools; machines; robotics; computer processing and apps; artificial intelligence, certain intangibles that have the characteristics of property, such as patents and trade or firm names the like which are owned by people individually or in association with others).
The Center for Economic and Social Justice (www.CESJ.org) of which I am a board member, is calling for a Capital Homestead Act (CHA) (www.capitalhomestead.org), which takes its lead from the Homestead Act of 1862. The Homestead Act offered the landless white citizens of America part-ownership of the country by giving them 160 acres of frontier land, free, if they produced on it income for themselves and their families for a period of five years. Of course, the finite free land divided up fast and not EVERY citizen became a landowner at a time when owning land was the most valued capital asset. Also it required the aspiring landowners to labor and work the land to make it productive.
In Lincoln’s America of 154 years ago, the problem confronting the vast majority of the citizens of our nation was that most people owned no land that they could work to sustain their livelihood. Today, the major problem for the vast majority of the people of our nation and of our world, for that matter, is that 99 percent of the people own no wealth-creating, income-producing capital (or a viable share) in a high-tech, capital-intensive economy. The Capital Homestead Act would make it possible for every American to become a viable owner of productive capital, without taking from the tiny elite who now own our corporations. The CHA is primarily a tax-sheltered vehicle for the democratization of capital credit through local banks. It would enable every child, woman, and man to accumulate wealth and receive dividend incomes from newly issued shares in new viable and growing corporations, without being taxed on the accumulations.
In addition to serving as a source of capital credit for corporate workers, the Act provides for Capital Homestead Accounts. CHAs would provide an ownership-building account for individuals who do not work for profit-making enterprises (or in place of), such as school teachers, civil servants, military personnel, police, and health workers, and for individuals who have no remunerative employment, such as the disabled, the unemployed homemakers and children.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://
