Bloomberg reported that President Donald Trump’s current tariff policies along with the freezing of federal agriculture grants were adding to the financial strain on US farmers, forcing them to seek “refuge in bankruptcy at the highest rate in years”.
This was against the backdrop of high input costs and the continued downward pressure on the prices of agricultural commodities.
According to the Bloomberg report, although the distress being experienced across the agriculture industry could be traced back to before Trump’s second term in office, he has “quickly nudged more farmers closer to the brink of going under and created turbulence for producers trying to make ends meet”.
“Unpredictable tariffs, immigration overhauls, federal programme cuts and frozen agriculture department funding are now part of the discussions farmers are having as they seek financial help.”
An attorney specialising in farm bankruptcies in North Carolina, David Mills of Narron Wenzel PA, told Bloomberg that there was a lot of anxiety among farmers.
He said fillings for farm bankruptcy increased sharply in 2019 when Trump initiated a trade war with China that resulted in the US agriculture sector being targeted with widespread retaliatory tariffs, similar to what was currently being witnessed from China.
In an attempt to prevent more farms from going under, the US government then made an estimated US$23 billion (about R430 billion) in funding available to cover export losses.
After this ‘bailout’, the number of bankruptcies of family farms fell every year until 2024. According to court records, last year the number of new cases increased to 216 from “a near 20-year low of 139”.
“Filings have continued to speed up this year, with 82 cases filed over the first three months of 2025, nearly doubling the figure for the same period a year ago,” the report said.
“With new tariffs and [US Department of Agriculture] USDA spending freezes layered on pre-existing distress factors, even more uncertainty has been injected into the sector, leading some to expect a banner year for farm bankruptcies.”
A bankruptcy attorney from Fresno in California, Peter Fear of Fear Waddell PC, told Bloomberg that the recent increase in Chapter 12 bankruptcies was being driven by “economic issues that have been simmering for a while”.
“A three-way squeeze of higher interest rates, higher operational costs, and lower crop and livestock prices has led to a substantial uptick in farmers seeking consultations regarding debt issues,” he said.
Industry lobbyists are now urging the US Congress to renew a long-delayed farming bill, which that could provide farmers with increased financial support.
There were, however, doubts about whether these ‘safety net provisions’ could be updated before they expired in December, especially amid debates about spending and legislation aimed at securing Trump’s policy priorities, the report added.
A forecast by the USDA indicated that if billions of dollars in economic and disaster assistance were provided to farmers under the December American Relief Act of 2025 (Public Law 118-158), it could reverse declining net farm income.
However, the current administration’s plans for mass deportations and tariffs would place further strain on budgets of farmers who are reliant on migrant labour and international markets, according to Bloomberg.
