A bill passed by the House Judiciary Committee would increase the amount of farm debt covered by chapter 12 bankruptcy.
Last week, the committee passed the Family Farmer Relief Act.
Introduced by New York Representative, Democrat Antonio Delgado, the bill would increase the current debt limit used to determine whether a farmer is eligible for relief under chapter 12 of the Bankruptcy Code, a specialized form of bankruptcy relief specifically intended for farmers, from approximately $4.4 million to $10 million.
Delgado says the bill gives “farmers and growers the flexibility they need to continue operations.”
The bill, which is the House companion to legislation introduced by Republican Senator Chuck Grassley and Senate Democrat Amy Klobuchar, is endorsed by the American Farm Bureau Federation and National Farmers Union.
Delgado says the changes reflect the increase in land values, as well as the growth over time in the average size of U.S. farm operations and are meant to provide farmers additional options to manage the downturn in the farm economy.