Lower commodity prices means financial stress is mounting for many in agriculture, and one attorney said it’s showing up with many farmers that don’t qualify for chapter 12 today, AgWeb.com reported. “Many farmers have debt that's greater than you can file using a chapter 12 bankruptcy; the limit is $4,411,400,” said Joe Peiffer, attorney and owner of Ag & Business Legal Strategies in Cedar Rapids, Iowa. Peiffer specializes in bankruptcies. He said that the current cap for bankruptcy is too low. “I have a farmer who filed about a year ago, and he was bucking the limit then, which is a little less, not much less, and he's farming about 1400 acres, all but 80 which is rented,” said Peiffer. Legislation introduced by a bipartisan group of lawmakers was recently introduced in Congress called the Family Farmer Relief Act would raise the debt limit for chapter 12 bankruptcies to $10 million — a move Peiffer says can’t come soon enough. “It's important to give farmers an escape hatch if they have to downsize in order to make it work,” said Peiffer. “Otherwise, the taxes will be an impediment that will stick with them a long time.” Mark Greenwood, chief diversified markets officers for Compeer Financial, sees first-hand the financial stress some producers are facing. He said it’s vital producers take an accurate financial snapshot of their operation by examining their financial position. Read more.
To read the full bill text of the "Family Farmer Relief Act," please click here.
