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U.S. farmers are embracing an alternative means of turning sunlight into revenue during a sharp downturn in crop prices: solar power, the Wall Street Journal reported. Solar panels are being installed across the Farm Belt for personal and external use on land where growers are struggling to make ends meet. The tit-for-tat tariffs applied by the U.S. and China to each other’s goods have cut demand for American crops. Futures prices for corn, soybeans and wheat are all trading around their lowest levels since 2010. Making matters worse, record spring rainfall left many farmers no time to plant a decent crop. Farmers have two options for adding solar power on their farms: lease land for energy companies to generate power to funnel electricity into the grid, as the Nielsens are doing; or install their own solar panels to cut their electricity bills. Both methods can amount to more than $1,000 a month in improved margins, according to farmers and renewable-energy advocates.

The number of U.S. farms fell by 12,800 to 2.029 million in 2018, the smallest ever, as the trade war pushes more farmers into retirement or bankruptcy, Reuters reported. By the end of 2018, the average U.S. farm size rose to 443 acres, a 12-year high and up from 441 million in 2017, according to the latest U.S. Department of Agriculture data. And the biggest farmers are growing their operations even more as retiring farmers choose to lease their land rather than selling it. When land becomes available for lease, only the biggest farmers can readily shoulder the costs needed to expand. The size of the loans smaller farmers would need to buy equipment, for example, are too big for applicants with little collateral, said Dave Kusler, president of the Bank of Hazelton in Hazelton, North Dakota. “It is almost impossible with what the costs are,” Kuslersaid. “In this area you can’t make a living on 1,000 acres.” Critics say the Trump administration’s policy of compensating growers for lost sales due to the trade war pays the bigger farm operations more, since payments are calculated by acres farmed. The Environmental Working Group, a conservation organization, said in a recent study the top 1 percent of aid recipients received an average of more than $180,000 while the bottom 80 percent were paid less than $5,000 in aid. Read more. 

Don't miss the "Hot Topics in Agriculture Law, Including New Chapter 12 Debt Limit" session and more at the 2019 Midwestern Bankruptcy Insitute Program on Oct. 3-4 in Kansas City. Click here to register. 

House Appropriations Committee Chair Nita Lowey (D-N.Y.) is proposing to block the White House request over its farm bailout program, potentially imperiling President Trump’s ability to direct payments to thousands of farmers, the Washington Post reported. A key Republican responded by attacking the Democrat’s move, saying it could threaten passage of a key bill needed to avoid a government shutdown. The bailout has emerged as one of several unresolved issues that lawmakers still need to sort out in order to meet a deadline by the end of this month. The bailout program was created last year amid complaints from agriculture groups that China had stopped purchasing their crops in retaliation for new tariffs that the White House imposed on Chinese imports. Trump has ordered that billions of dollars in taxpayer funds be paid directly to farmers as a way to offset their losses. The bailout hadn’t needed congressional approval up to this point, but now the timing of the payments is tied to congressional approval. The Department of Agriculture is planning to spend upwards of $28 billion in payments over two years, but the Depression-era program Trump is using for the program has a $30 billion borrowing limit that they are expected to hit this year before the completion of a second round of payments.

Senior government officials, including some in the White House, privately expressed concern that the Trump administration’s nearly $30 billion bailout for farmers needed stronger legal backing, the Washington Post reported. The bailout was created by the Trump administration as a way to try to calm outrage from farmers who complained they were caught in the middle of the White House’s trade war with China. In an attempt to pacify farmers, the Agriculture Department created an expansive new program without precedent. As part of the program, the USDA authorized $12 billion in bailout funds last year and another $16 billion this year, and Trump has said more money could be on the way. But two Agriculture Department officials involved in the bailout program said that they were worried the funding could surpass the original intent of the New Deal-era Commodity Credit Corp., which is being used to distribute the money. The CCC, as it is known, had previously been used only to create substantially more limited programs. Separately, some officials in the Office of Management and Budget also raised questions about the scope of $16 billion in a second round of bailout funds. They pushed the Agriculture Department to provide more legal reasoning for the effort, the officials said. In a statement, a USDA spokesman officials said the concerns raised by OMB were already resolved, however.

ABI will hold a free media webinar today at 3 p.m. EDT featuring experts that will provide an overview of the new bankruptcy laws and how they will help financially distressed small businesses, disabled veterans and family farmers going forward. President Donald J. Trump on Aug. 23 signed the “Small Business Reorganization Act of 2019” (SBRA, H.R. 3311), “HAVEN Act” (H.R. 2938) and “Family Farmer Relief Act of 2019” (H.R. 2336) into law. Speakers on the webinar include:

• Robert J. Keach of Bernstein, Shur, Sawyer & Nelson (Portland, Maine) to discuss SBRA. Keach testified on ABI’s behalf in support of H.R. 3311, H.R. 2938 and H.R. 2336 before the House Judiciary Committee Subcommittee on Antitrust, Commercial and Administrative Law on June 25.

• Kristina Stanger of Nyemaster Goode, P.C. (Des Moines, Iowa) and Jessica Hopton Youngberg of the Veterans Legal Services clinic at the New England Center & Home for Veterans in Boston, both members of ABI's Veterans' Affairs Task Force, will discuss the HAVEN Act.

• Joseph A. Peiffer of Ag & Business Legal Solutions (Cedar Rapids, Iowa) and Donald L. Swanson of Koley Jessen (Omaha, Neb.), both with more than 30 years of experience in bankruptcy and agricultural law, will discuss the Family Farmer Relief Act.

The moderator for the webinar will be ABI Executive Director Samuel J. Gerdano. To register to attend the webinar today, please click here.

ABI will hold a free media webinar on Wednesday at 3 p.m. EDT featuring experts that will provide an overview of the new bankruptcy laws and how they will help financially distressed small businesses, disabled veterans and family farmers going forward. President Donald J. Trump on Aug. 23 signed the “Small Business Reorganization Act of 2019” (SBRA, H.R. 3311), “HAVEN Act” (H.R. 2938) and “Family Farmer Relief Act of 2019” (H.R. 2336) into law. Speakers on the webinar include:

• Robert J. Keach of Bernstein, Shur, Sawyer & Nelson (Portland, Maine) to discuss SBRA. Keach testified on ABI’s behalf in support of H.R. 3311, H.R. 2938 and H.R. 2336 before the House Judiciary Committee Subcommittee on Antitrust, Commercial and Administrative Law on June 25.

• Kristina Stanger of Nyemaster Goode, P.C. (Des Moines, Iowa) and Jessica Hopton Youngberg of the Veterans Legal Services clinic at the New England Center & Home for Veterans in Boston, both members of ABI's Veterans' Affairs Task Force, will discuss the HAVEN Act.

• Joseph A. Peiffer of Ag & Business Legal Solutions (Cedar Rapids, Iowa) and Donald L. Swanson of Koley Jessen (Omaha, Neb.), both with more than 30 years of experience in bankruptcy and agricultural law, will discuss the Family Farmer Relief Act.

The moderator for the webinar will be ABI Executive Director Samuel J. Gerdano. To register to attend the webinar tomorrow, please click here. 

President Donald J. Trump on Friday signed the Small Business Reorganization Act of 2019 (H.R. 3311), HAVEN Act (H.R. 2938) and Family Farmer Relief Act of 2019 (H.R. 2336) into law. The bipartisan bills, which ABI testified in support of in June, passed the House in late July and the Senate on August 1.
 

H.R. 3311, the “Small Business Reorganization Act of 2019” (SBRA), which will take effect in February 2020, adds a new subchapter V to chapter 11, providing a better path for small businesses to successfully restructure, reduce liquidations, save jobs and increase recoveries to creditors while recognizing the value provided by the entrepreneur. It adopts the current definition of a “small business debtor” as a person in commercial or business activity with aggregate or noncontingent liquidated secured and unsecured debts as of its bankruptcy filing date of not more than $2,725,625. It is estimated that about half the chapter 11 cases filed today could qualify for subchapter V treatment. Introduced on June 18 by Reps. Ben Cline (R-Va.), David Cicilline (D-R.I.), Doug Collins (R-Ga.) and Steve Cohen (D-Tenn.), the SBRA is inspired by the work of the National Bankruptcy Conference and ABI’s Commission to Study the Reform of Chapter 11. A bipartisan companion bill (S. 1091) was introduced on April 9 in the Senate by Sen. Charles Grassley (R-Iowa). Click here to read ABI’s press release.
 

H.R. 2938, the “Honoring American Veterans in Extreme Need Act of 2019” (HAVEN Act) was introduced on May 23 in the House by Reps. Lucy McBath (D-Ga.) and Greg Steube (R-Fla.) to exclude VA and DoD disability payments from the monthly income calculation used for bankruptcy means testing. The bill was included in the National Defense Authorization Act, which passed on June 27. ABI Veterans Affairs Task Force Member Holly Petraeus, a former assistant director of the Consumer Financial Protection Bureau, testified in favor of the bill on behalf of the Task Force before the House Judiciary Committee. ABI’s Commission on Consumer Bankruptcy also endorsed the provision. A bipartisan companion bill (S. 679) was introduced on March 6 in the Senate by Sen. Tammy Baldwin (D-Wis.). Click here to read ABI’s press release.
 

H.R. 2336, the “Family Farmer Relief Act of 2019” was introduced on April 18 in the House by Rep. Antonio Delgado (D-N.Y.) to update chapter 12 of the U.S. Bankruptcy Code to reflect the economic challenges facing distressed farmers. Chapter 12 was added to the Bankruptcy Code in 1986 to provide reorganization relief to family farmers and fishermen to more properly handle this specialized area of bankruptcy law. Farm sizes have increased substantially since 1986; meanwhile, net farm income has declined since 2013. A survey released on Aug. 15 by the Federal Reserve Bank of Chicago found that Midwest bankers were reporting that the percentage of farm loans their customers were having problems repaying hit a 20-year high in the second quarter of this year. The debt limit for chapter 12 filings was $4.3 million; H.R. 2336 raises this limit to $10 million. A bipartisan companion bill (S. 897) was introduced on March 27 in the Senate by Sen. Charles Grassley (R-Iowa), the author of chapter 12. Click here to read ABI’s press release.

Wisconsin continues to top the nation in family-farm bankruptcies, but the state’s lead has narrowed, data gathered by the American Farm Bureau Federation shows, the Milwaukee Journal Sentinel reported. From July 2018 through June 2019, Wisconsin farmers filed 45 bankruptcies under chapter 12, a section of the U.S. bankruptcy code that provides financially troubled family farmers with a streamlined path to repay all or part of their debts. The Wisconsin total was five fewer than the previous 12-month period, according to the Farm Bureau, which used U.S. Courts data to compile the report. Kansas, meanwhile, saw chapter 12 filings increase by 13, to 39. In Minnesota, filings increased by 11, to 31. With depressed milk prices besetting Wisconsin’s thousands of dairy operations, the state has led the country in farm bankruptcies in recent years. Ronald Wirtz, regional outreach director of the Federal Reserve Bank of Minneapolis, also has pointed to Wisconsin’s smaller average farm size as a factor. Wisconsin also has lots of farms — the 11th highest total in the nation, data from the 2017 U.S. Census of Agriculture shows. Even accounting for the relatively large number of farms here, however, Wisconsin’s farm bankruptcy rate is among the highest in the country.