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Dairy farmers may face bankruptcy

Farmers across America battled a harsh year. The drought they experienced left them with less produce, forcing the cost of crops like corn to rise. Coupled with this, Congress failed to renew or update legislation known as the farm bill, which sets agricultural policy for the country. While this has been difficult for all farmers, many of the programs have continued. However, dairy farmers, including those in Wisconsin, are in a unique position because they are not covered.

Grappling with the high cost of feed for their cows, some dairy farmers find themselves struggling to make ends meet. Now, without the legislation that paid small-scale dairy farmers when the price of milk dipped too low, many farms face bankruptcy: dozens have already filed for it. In previous years, this program was the difference between staying afloat or sinking. Dairy farms without their own source of feed have been particularly hard-hit, but even some farms that produce grain were adversely affected.

Politics seem to be in the way of a future bill. The Senate passed a version of the farm bill, one that would try to stabilize milk prices through controlling some of the supply. Additionally, insurance would be available for purchase by farmers to cover the gap between the price of milk and production expenses. While people are confident that Congress will eventually pass a new bill, it might be too late for some farmers. It has been more than a month since the original farm bill expired, and many farmers worry that they will be facing bankruptcy before a new one is passed.

Business bankruptcy offers both solutions and challenges to financial woe. Wisconsin farmers can choose between federal or state bankruptcy exemptions. Farms considering it in order to prevent going out of business should consider their options and find a resolution that works best for their situation.

Source: Associated Press, “Dairy Farm Safety Net Dies With Farm Bill,” Lisa Rathke, Oct. 21, 2012

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