The Alarming Bankruptcy Trend (Editorial)

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The soaring number of farm bankruptcies in Arkansas, as detailed by Mark Friedman in our July 7 issue, should alarm everyone, not just those in agriculture.

Agriculture is the state’s biggest industry, contributing $24.3 billion to the Arkansas economy in 2023, according to the Arkansas Cooperative Extension Service. But that industry is under threat. For the quarter that ended March 31, 15 Chapter 12 bankruptcies were filed in Arkansas, putting Chapter 12s — the kind of bankruptcies geared toward family farms and fishermen — on track to surpass all last year’s filings, which totaled 16.

Simple economics lies behind the increase in bankruptcy filings: Commodity prices are declining while the cost to produce crops is rising.

The American Relief Act, passed by Congress last December, continued the 2018 Farm Bill through Sept. 30. And the One Big Beautiful Bill Act, signed July 4, strengthened the safety net for U.S. farmers.

But the act is not a substitute for a new Farm Bill, as the American Farm Bureau Federation has noted. And it remains to be seen whether our currently deeply polarized Congress can agree on a new Farm Bill, one that might address the troubling trend in farm bankruptcies.