Farm bankruptcies jump to highest level since 2011 as Trump's tariffs bite
- A tit-for-tat tariff dispute between the Trump administration and China has piled on pressure in an already strained Farm Belt.
- Between January and September, Chapter 12 bankruptcy filings rose by nearly a quarter to the highest level since 2011.
- The unprecedented amount of aid the administration has delivered to farmers has raised concerns about misuse of funds and drawn backlash from agricultural groups and bipartisan lawmakers.
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A tit-for-tat tariff dispute between the Trump administration and China has piled on pressure in an already strained Farm Belt, leaving an increasing number of growers unable to stay afloat.
Farmers filed 580 Chapter 12 bankruptcy filings between January and September, according to the American Farm Bureau Federation, the largest farm advocacy group in the country. That was a 24% increase from the previous year and the highest level since 2011, when there were 676 filings.
China placed steep tariffs on US farm products last year to retaliate against punitive moves by the Trump administration, adding to challenges for farmers already faced with harsh weather conditions and low commodity prices. Those have sent exports sharply lower and made it difficult for growers to plan the next harvest.
"Farmers and ranchers struggle with a prolonged downturn in the farm economy that's been made worse by unfair retaliatory tariffs on US agriculture as well as two consecutive years of adverse planting, growing and harvesting conditions," said John Newton, the chief economist at the federation.
Ahead of the 2020 elections, the president has increasingly attempted to placate farmers who helped elect him in 2016. The Trump administration has announced nearly $30 billion in bailout programs designed to mitigate losses from the trade dispute.
But the unprecedented amount of government aid has raised concerns about misuse of funds and drawn backlash from agricultural groups and bipartisan lawmakers. Roughly 40% of farm income is expected to come from government aid, according to Department of Agriculture data analyzed by the federation.
"The trend is a concern," Newton said. "The support provided to farmers in 2018 and 2019 is expected to alleviate some of the financial stress; however, not all farmers will benefit from trade assistance, farm bill programs, crop insurance or disaster aid."
Farm bankruptcies rose to or above decade-highs this year in Iowa, Kansas, Maryland, Minnesota, Nebraska, New Hampshire, South Dakota, Wisconsin and West Virginia, according to the federation.
The president often acknowledges that farmers have been hurt by retaliatory tariffs but asserts that protectionism will help win fairer agricultural policies in the long run.
"Our farmers have been great. They never wavered," Trump said in a Cabinet meeting last week. "And I think, in many ways, the farmer maybe is going to be the biggest beneficiary of what we're doing - certainly one of them."
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