Fayetteville, Arkansas – Arkansas led the nation in Chapter 12 farm bankruptcies in the third quarter of 2026, according to a recent University of Arkansas Cooperative Extension Service report highlighting financial strain in the agricultural sector.
National Agricultural Law Center Director Harrison Pittman said 32 agricultural operations in Arkansas had sought Chapter 12 protection so far this year. The filings reflect continued challenges for producers, following a year in which the state also ranked first nationally.
“So far this year, 32 agricultural operations in Arkansas have filed for Chapter 12 bankruptcy protection, highlighting the financial challenges facing the state’s agricultural sector.”
The findings come from reporting by the UA Cooperative Extension Service and research examining agricultural bankruptcies. The 32 filings represent the year-to-date total cited by Pittman, rather than filings from the third quarter alone.
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Chapter 12 provides a bankruptcy process specifically for family farmers with regular annual income. It allows qualifying farmers to reorganize their debts while continuing to operate, offering a path to address financial obligations instead of liquidating assets.
That distinction is important when interpreting the figures. A Chapter 12 filing represents a request for bankruptcy protection and debt restructuring, rather than necessarily marking the end of a farming operation.
“The number of Chapter 12 bankruptcies filed this quarter underscores the significant financial pressures facing U.S. agriculture,” Pittman said.
The National Agricultural Law Center monitors those pressures through its DEBT Project, which tracks both Chapter 12 and Chapter 11 bankruptcies in agriculture. Following both categories helps researchers examine financial distress beyond the process designed specifically for family farmers.
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Chapter 11 is the bankruptcy process more commonly used by businesses. Center officials reported that Chapter 11 filings rose 11.5% during the first three quarters of 2026 compared with the corresponding period in 2025.
Arkansas’ latest Chapter 12 ranking follows a similar finding earlier this year. A March UA report showed the state led the nation in 2025, recording 33 filings and the largest year-over-year increase. The 32 filings reported so far in 2026 are already close to that previous full-year total, although the reporting periods differ.
The National Agricultural Law Center is based at the University of Arkansas System Division of Agriculture. Created by Congress in 1987, it provides nonpartisan research and information on agricultural and food law issues nationwide.
