Wisconsin has seen the highest number of farm bankruptcy filings over the past year, according to a recent report by the American Farm Bureau Federation.

According to the report, which tracked bankruptcy filings over 12 months ending in September 2019, the Midwest accounted for 40% of the nation's 580 Chapter 12 farm bankruptcy filings (a 24% increase from the previous year). Bankruptcy relief under Chapter 12 requires businesses to establish a plan to pay their debts to creditors over three to five years.

By the end of the year, the agricultural industry is expected to receive around $33 billion related to trade and disaster assistance, the farm bill and insurance indemnities from the federal government, the report notes. Comparatively, the government spent $80 billion in 2008 to aid General Motors and Chrystler during the auto bailout. But even with record amounts of help, the outlook for family farms this year doesn't look promising: farm debt is expected to reach $416 billion in 2019, the highest level ever.

In an effort to increase revenue, farmers in some states are diversifying their agricultural products and planting more hemp. Iowa's Republican Gov. Kim Reynolds, for example, recently signed legislation in which the state will license and regulate hemp production. Like marijuana, hemp comes from the cannabis sativa plant, but unlike marijuana, hemp is not considered to be psychoactive since it contains very low levels of THC.

Other farms are working with environmental and advocacy groups to fight climate change by experimenting with new crops, including hemp, and practicing sustainable farming, according to CNBC .

For example, a start-up company called Indigo Agriculture plans to pay up to 3,000 farmers by the end of 2019 to move to environmentally friendly practices. The group will pay farmers around the U.S. $15 for every tonne (also known as a metric ton) of carbon dioxide that is stored underground, which farmers can achieve by planting cover crops between main crops and by cutting down on their tilling of the soil.

Indigo Agriculture CEO and Director David Perry told the Financial Times that a farmer can probably capture two to three carbon tonnes of carbon dioxide per acre per year.

(Courtesy of the American Farm Bureau Federation)

Wisconsin saw 48 Chapter 12 filings over the 12-month period ending in September, followed by Georgia, Nebraska and Kansas, each of which had 37 filings. Minnesota, California, Texas, Iowa, Pennsylvania and New York round out the top 10 states for farm bankruptcies.

Oklahoma experienced the largest increase in farm bankruptcy filings, rising from two filings last year to 17 this year. All regions of the U.S. saw an increase in filings, with the largest jumps in the Northwest ( up by 74%) and West (up by 65%).

(Courtesy of the American Farm Bureau Federation)

Experts attribute the farm industry's downturn to the U.S.'s trade war with China, along with unfavorable growing conditions thanks to droughts and floods.