January 30, 2023

Tax Talks

USDA Emergency Relief Programs for Producers

By: Dario Arezzo


Emergency Relief Program (ERP) phase one closed on December 16, 2022. Phase two opened on January 23rd and runs through June 2, 2023. The funds appropriated by Congress will be distributed through the Emergency Livestock Relief Program (ELRP) and the ERP. Regarding ELRP, the Farm Service Agency will release more information once they have finished its analysis on the 2021 drought and wildfire impacts on livestock producers.

According to the USDA, ERP phase 2 is a “tax-based certification program that provides assistance for producers who suffered a loss in revenue due to necessary expenses associated with losses of eligible crops (excluding crops intended for grazing), due in whole or in part, to a qualifying disaster event that occurred in the 2020 or 2021 calendar year.”

Pandemic Assistance Revenue Program (PARP) applications also run from January 23 to June 2, 2023. According to the USDA, “PARP provides direct financial assistance to producers of agricultural commodities who suffered at least a 15% loss in gross revenue in calendar year 2020 due to the COVID-19 pandemic. PARP will help address gaps in previous pandemic assistance, which was targeted at price loss or lack of market access, rather than overall revenue losses.”   

Payments to eligible producers will be based upon a comparison of the producer’s gross revenue from 2020 compared to either 2018 or 2019, as elected by the producer.” Eligible commodities include “a crop, aquaculture, livestock, livestock byproduct, or other animal or animal byproduct that is produced as part of a farming operation and is intended to be commercially marketed.”

Information on ERP phase two can be found here, while information on PARP can be located here. There are eligibility and compliance requirements surrounding both programs.

As is the case with many USDA programs, there are usually application questions that require the producer to consult their accountants. These questions surround items such as adjusted gross income limitations, eligible farm income and entity structure. Contact your Farm Credit East tax preparer with any questions as you navigate the accounting and tax questions, as well as our Crop Growers crop insurance team for additional information on program specifics.

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Tags: crop revenue, economy, grants, legislation, taxes

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