President Trump Signs Antonio Delgado’s Law Providing Protection for Agricultural Residents

On Aug. 26, President Trump signed a law that would increase the debt relief for family farmers from $3,237,000 to $10 million.

Congressman Antonio Delgado introduced the Family Farmer Relief Act of 2019 to the House of Representatives on April 19. President Trump received the bill on Aug. 13 after the House and the Senate reviewed it, and it was signed and became public law on Aug. 26.

This law updates Chapter 12 of the U.S. bankruptcy code, which was created in 1986. Chapter 12 outlines the process in which a family farmer or fisherman could apply for bankruptcy in the U.S. 

According to the U.S. Bankruptcy Code, “filing bankruptcy can help a person by discarding debt or making a plan to repay debts.”

The previous amount covered by the 1986 version was $3,237,000, however, according to the National Law Review, “the size of the average farm has increased substantially since then, and many farms were being forced into the more expensive and cumbersome Chapter 11 process. With this update, lawmakers sought to update Chapter 12 to reflect the current economic challenges facing distressed farmers.”

Chapter 11 of the bankruptcy code was intended for bigger corporations and the filing fee can be more than $1,700, while the filing fee for Chapter 12 is only $275 and is easier for small family farms to file. This update to the law makes even more small farms able to file for bankruptcy if needed, and ultimately avoid foreclosure.

“The number of farms filing for Chapter 12 protection is up 13% during the past year, while the farm loan delinquency rate is at a six-year high,” according to the National Law Review. “Perhaps most ominously, the level of U.S. farm debt has risen over $400 billion—a level not seen since the farm debt crisis of the 1980s.”

There was a need to change the 1986 law due to an increase of average farm size in the U.S., an increase in land values and a decreasing agricultural economy.

“Our biggest challenges are the lack of an affordable and secure land base, lack of adequate infrastructure (which we can’t build due to lack of secure and affordable land), declining demand for local/organic food, [and] dealing with erratic weather patterns,” said Becky Fullam, co-owner of Old Ford Farm in New Paltz.

“It is a victory for our small and mid-size farmers who now have the flexibility to reorganize their debt and continue operations in what continues to be a challenging time for agriculture,” Delgado said in a press release on Aug. 26.

The law was co-sponsored by 18 Democrats and nine Republicans and is endorsed by institutions such as the American Farm Bureau, National Farmers Union and the American Bankruptcy Institute.