مقاله انگلیسی رایگان در مورد استرس مالی و ورشکستگی مزرعه – امرالد 2018

The increased widespread financial stress from the farm crisis of the 1980s required policy intervention from Congress, which enacted legislation to mitigate the damages to the agricultural sector. This crisis was partially due to a rapid rise in farmland values – largely purchased on credit – followed by a sudden drop in values coupled with high interest rates, easy access to credit, and plummeting net farm incomes. Many farmers experienced financial stress, i.e. they struggled to generate enough cash flow to meet their debt service payments. Prior options of bankruptcy for farms generally required the liquidation of their farmland, a depressed asset at the time, which would result in cessation of operation. With the passage of the Family Farmer Bankruptcy Act of 1986, Chapter 12 bankruptcy became the preferable option for family farms as it helped ease financial stress and allowed for continued operation of their farm following a debt restructuring plan. Chapter 12 was originally set to expire in October 1993 but Congress extended the expiration date 11 times (Harl, 2006). In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) amended Chapter 12 bankruptcy to be a permanent option, allowed for higher debt limits, and implemented less strict income requirements than before. Trends in declining net farm income, increasing debt use, and stagnating land values are projected to continue beyond 2017 and pose a problem to the agricultural sector (Patrick et al., 2016). These factors place financial stress on farms, which may or may not be able to sustain these levels of stress (Briggeman, 2010). The current trends follow a period of rapid appreciation of land values and net farm incomes, which parallels the 1980s farm crisis. While the farm sector debt-to-asset ratio peaked above 20 percent in 1985, debt-to-asset ratios have not been above 15 percent since 1995 which helps illustrate that the magnitude of financial stress today is not as severe as the 1980s farm crisis (Ellinger et al., 2016). One critical difference between the 1980s farm crisis and the current economic climate of the agricultural sector is a farm’s ability to seek financial relief through Chapter 12 bankruptcy.