Washington: US farm bankruptcies in September surged 24 per cent to the highest since 2011 amid strains from President Donald Trump’s trade war with China and a year of wild weather.
Growers are also becoming increasingly dependent on trade aid and other federal programs for income, figures showed in a report by the American Farm Bureau Federation, the nation’s largest general farm organisation.
The squeeze on farmers underscores the toll China’s retaliatory tariffs have taken on a critical Trump constituency as the president enters a re-election campaign and a fight to stave off impeachment. The figures also highlight the importance of a “phase one” deal the administration is currently negotiating with Beijing to increase agriculture imports in return for a pause in escalating US levies.
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Almost 40 per cent of projected farm profit this year will come from trade aid, disaster assistance, federal subsidies and insurance payments, according to the report, based on Department of Agriculture forecasts. That’s $33 billion of a projected $88 billion in income.
The trade war and two straight years of adverse weather rattled farmers already facing commodity price slumps.
Chapter 12 bankruptcy filings in the 12 months ended September rose to 580 from a year earlier. That marked the highest since 676 cases in 2011 under the chapter of the bankruptcy code tailored for farms. The total “remains well below” historical highs in the 1980s, the federation said.
Recent bankruptcies were concentrated in the 13-state Midwestern region, a key battleground in the presidential election where grain, soybean, hog and dairy farms have been hit by trade disputes. More than 40 per cent, or 255 filings, were in the region.