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Legislation targets family farms in dire straits

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    A farm bill proposed by U.S. Rep. Antonio Delgado seeks to ease bankruptcy rules for farmers dealing with an economic downturn.
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    Proposed legislation would make it easier for smaller farms to maintain their business despite financial hardships.
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    The Family Farmer Relief Act of 2019 aims to make it easier for farmers to restructure their business and keep their doors open. Heather Ainsworth/The New York Times
April 22, 2019 10:04 pm

U.S. Rep. Antonio Delgado, D-19, has joined a bipartisan group of congressmen in introducing a bill that would provide relief to farmers seeking to reorganize debt through bankruptcy.

The bill is known as the Family Farmer Relief Act of 2019, and, if passed, would ease the process of reorganizing debt through Chapter 12 bankruptcy rules. The bill would restructure the rules, making more farms eligible for bankruptcy.

“For folks in upstate New York, farming is more than a job — it’s a way of life,” Delgado said in a statement. “And in this extremely challenging farm economy, we must come together to help our family farmers overcome years of low prices and increased market consolidation. The Family Farmer Relief Act will provide the critical restructuring and repayment flexibility these folks need to get through these hard times without permanently closing their operations.”

Delgado was joined by House Judiciary Committee Ranking Member Jim Sensenbrenner, R-Wis., House Agriculture Committee Chairman Collin Peterson, D-Minn. and U.S. Reps. T.J. Cox, D-Calif., Kelly Armstrong, R-N.D. and Dusty Johnson, R-S.D., in proposing the bill.

A companion bill is under consideration in the U.S. Senate.

Both bills would expand the debt cap that can be covered under Chapter 12 bankruptcy from $3,237,000 to $10 million, Delgado said, giving farmers more options in keeping their operations open.

Lloyd Zimmermann, owner of Black Horse Farms in Coxsackie, was not familiar with the proposed bill but said small, family-owned farms need assistance.

“The farm economy is sick,” Zimmermann said. “There are no dairy farms left in the town of Coxsackie; there is, I think, one left in the town of Catskill. There is no incentive for young farmers to come in and take it over because it costs too much money.”

The problems, Zimmermann said, are widespread across the state.

“This is happening all over the state of New York,” Zimmermann said. “The state has not done very much for the farmers, especially in western New York, where they could really use the help.”

New York Farm Bureau spokesman Steve Ammerman said the legislation could help farms by raising the operating debt cap, ensuring more farms qualify for assistance.

“This legislation would lift the cap for those businesses and family farms that seek to file Chapter 12 bankruptcy,” Ammerman said. “Many years ago, Congress put into place some requirements for large companies that applied for bankruptcy and essentially this would apply to family farms. This would remove some of the reorganization requirements that currently exist, making it easier and less expensive for farms to reorganize if they are facing a crushing debt load.”

With bipartisan support in both houses of Congress, Ammerman said he is hopeful the legislation will be adopted.

He added that low prices have created a difficult agricultural economy for smaller farms.

“This is important because the farm economy has been in such dire straits for the past four years because of low prices,” Ammerman said. “Many farms have eaten into equity to pay the bills so they have taken on more loans and the debt-to-asset ratio nationally has reached a 30-year high, which shows this is a large problem across the country, not just in New York state. This would help farms by providing debt relief and allow them to restructure their business and hopefully come out in a stronger position and find their way out of this economic downturn.”

Between 2012 and 2017, 2,100 farms closed across New York state, representing a 9% loss, Ammerman said.

The 2012 agricultural census conducted by the U.S. Department of Agriculture, the most recent figures available, indicate the Twin Counties have experienced a similar loss of farms.

In Greene County, there were 286 farms in 2007, and 273 in 2012, a 5% decline. In Columbia County the numbers were more problematic — in 2007 there were 554 farms countywide, and 494 in 2012, a decline of 11%, according to the USDA.

Tessa Edick, from FarmOn! Foundation in Copake, said family farmers have not received the support they deserve over the years.

“The farmer has not sustained a noble and respected profession yet we all need to eat, so it is important to provide a viable livelihood for family farms over Big Agriculture, which is money we already pay in our taxes for subsidies that get taken advantage of by corporate America,” Edick said.

She added that Delgado’s bill could provide a real service to family farms.

“The idea of relief would be incredible for family farms, to be relieved of debt when really they are doing a service for human rights so good food is not a privilege,” Edick said. “If we could focus on debt relief for farmers for food that is vital for living — which would be fruits, vegetables, grains, dairy — that would certainly be a lift for our agricultural community.”

The bill will next go before the Judiciary Committee in Congress for further consideration.