The problem for the individual farmers is that they own a farm covered in peach trees, but they can't profitably sell peaches. The money will let them remove all the peach trees and then develop the land for some new crop.

This is also good for the remaining peach farmers because it keeps peach prices high, and also because massive forests of unattended peach trees leads to pest problems.

They plant something else. There just isn't demand for canned peaches anymore, so this is exactly what should happen. It's just unfortunate that it had to happen all at once with this bankruptcy rather than in a more organized fashion that could have prevented these unneeded orchards from being planted in the first place.

Significantly reduced water usage for one. The water is the limiting factor.