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Matt Kempner: Georgia farm troubles lead to spike in bankruptcy action

Matt Kempner, The Atlanta Journal-Constitution on

Published in Business News

The number of Georgia farm bankruptcies has surged in recent months to among the highest in the nation, as growers grappled with poor prices, burdensome tariffs and lingering effects from brutal weather.

But the level is still lower than it was in some other recent years.

Though millions of dollars in assistance have begun to roll out, many farmers are still waiting for promised federal aid for natural disasters such as Hurricane Michael. It's unlikely that the payouts will make up for all the losses that have grown over the years, bankruptcy attorneys said.

And several expect more local farmers to seek bankruptcy court protection in the next few months.

"Farmers have not had a real good year in a long time," said Wes Boyer, a Macon bankruptcy attorney who often works with farmers.

He predicted more troubles as they continue to wrestle with low prices for what they grow and raise. Meanwhile, their ownership interests continue to erode as they borrow -- if they can find a willing lender -- to make up for the losses.

 

Creditors generally have been patient with farmers waiting for federal assistance, said Ray Holland, a South Georgia bankruptcy attorney. But farmers are seeing the limits.

"More people are running out of options and are beginning to get sued finally," he said.

Georgia logged 37 new Chapter 12 filings in the latest 12-month period ending Sept. 30, according to a report last week from the U.S. Courts. That's up from 25 for the same period a year earlier. But it's down from 43 and 41 in the periods for 2017 and 2016, respectively. Chapter 12 is set aside largely for family farmers. Both Georgia's latest 12-month total number of cases and its growth compared to the same period a year ago are among the highest in the nation, according to the American Farm Bureau Federation.

The state's biggest increase -- 14 additional filings -- came in the latest reporting period of July, August and September, as some farmers waited for the U.S. Department of Agriculture to distribute a portion of new disaster aid. The assistance had been passed by Congress and signed by the president in early May, following months of rancor.

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