Are you a producer of agricultural commodities who suffered a decrease in revenue due to the COVID-19 pandemic? If so, you may be eligible for financial assistance through the Pandemic Assistance Revenue Program (PARP) offered by the USDA. In this article, we will provide you with all the information you need to know about PARP, including eligibility requirements, how to apply, and when to expect payments.
About PARP
PARP is part of USDA’s Pandemic Assistance for Producers initiative and aims to provide direct financial assistance to agricultural producers who experienced at least a 15 percent decrease in gross revenue in 2020. Administered by USDA’s Farm Service Agency, PARP is not a loan program, and there is no fee to apply.
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Eligibility
To be eligible for PARP, you must have been involved in farming and have suffered a 15 percent decrease in allowable gross revenue in 2020 compared to either 2018 or 2019. Producers entitled to a share in agricultural commodities or who would have been entitled if the commodities were produced and marketed are eligible. Additional eligibility requirements, such as legal ownership and adjusted gross income, can be found at farmers.gov/parp.
Contract growers, however, are not eligible for PARP.
Gross Revenue Calculation
Allowable gross revenue includes all revenue received by a producer on a “cash basis” during the calendar year and reported to the IRS. This includes revenue from the production or sale of agricultural commodities, including crops, aquaculture, livestock, and other animal byproducts. It also includes certain USDA program payments and crop insurance proceeds.
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When calculating your allowable gross revenue, remember to include sales of agricultural commodities, cooperative distributions, and certain federal disaster program payments, among other revenue sources. For a detailed description of allowable revenue, visit farmers.gov/parp.
Certain items, such as animals for personal consumption, wild free-roaming animals, and cannabis with a THC concentration exceeding 0.3 percent, should be excluded from the calculation.
PARP Payments
PARP payments are calculated based on the 15 percent decrease in allowable gross revenue in 2020 compared to either 2018 or 2019. The payment is equal to the difference between your allowable gross revenue from the chosen year and your allowable gross revenue from 2020, multiplied by 80 percent. However, if you fall into specific categories such as a beginning farmer or rancher, limited resource farmer or rancher, socially disadvantaged farmer or rancher, or veteran farmer or rancher, the payment will be multiplied by 90 percent.
It’s important to note that prior pandemic assistance, including CFAP 1 and 2, PLIP, SMHPP, and 2020 ERP payments, will be subtracted from the PARP payment.
To calculate your expected PARP payment, use the following equation:
Expected PARP Payment = [(Allowable gross revenue from either 2018 or 2019 – Allowable Gross Revenue from 2020) X Either 80% or 90%] – Any CFAP 1 and 2, PLIP, SMHPP, or 2020 ERP Payments
Application Process
To apply for PARP, contact your local USDA Farm Service Agency office. You can find the contact information for your local office at farmers.gov/service-locator. The FSA staff will guide you through the application process and provide the necessary forms, including the program application form (FSA-1122). You may also call 877-508-8364 to speak with a USDA employee who can assist you.
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You do not need to work with a third-party entity to complete your PARP application. USDA provides free assistance in filling out program applications and other paperwork. Language translation services are available for applicants requiring translations.
When submitting your PARP application, you may need to provide supporting documentation to verify your eligibility and the information included on the application. This may include receipts, tax returns, or other documents deemed acceptable by USDA.
Payment and Tax Considerations
FSA will issue PARP payments after the signup period ends. Payments may be prorated or subject to lower maximum limits if the total calculated payments exceed the program’s allocated funding.
PARP payments will not be withheld to satisfy any USDA debts, nor will they be offset by Treasury. However, it’s important to note that these payments are considered taxable income. FSA reports program payments to the IRS and program participants on a CCC-1099-G form. Consult with the IRS or your tax preparer for guidance on how this income impacts your business.
Conclusion
PARP provides direct financial assistance to agricultural producers affected by the COVID-19 pandemic. To determine your eligibility and apply for PARP, contact your local USDA Farm Service Agency office or visit farmers.gov/parp. Remember to gather the necessary documents and be aware of the payment and tax considerations. USDA is committed to supporting producers every step of the way, so don’t hesitate to reach out for assistance.
Source: https://t-tees.com
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