[Archived] Pandemic Assistance Revenue Program FAQ

About PARP

What is the Pandemic Assistance Revenue Program (PARP)? 
 
USDA’s Pandemic Assistance Revenue Program (PARP) provides direct financial assistance to producers of agricultural commodities who suffered at least a 15 percent decrease in allowable gross revenue in calendar year 2020 due to the COVID-19 pandemic. This new program is part of USDA’s Pandemic Assistance for Producers initiative. 
 
What USDA agency is administering PARP? 
 
PARP is administered by USDA’s Farm Service Agency. 
 
When does the signup period for PARP open and close? 
 
USDA’s Farm Service Agency will accept PARP applications from January 23, 2023 through June 2, 2023.  
 
Are PARP funds a loan that must be repaid? Is there a fee to apply? 
 
No. PARP is not a loan program and there is no fee to apply. 
 
I haven’t previously participated in any USDA programs. Can I apply for PARP? 
 
Yes. Participation in other USDA programs is not a prerequisite to apply for PARP. 
 
Is there an Adjusted Gross Income (AGI) limit to receive PARP assistance? 
 
Yes. To be eligible for a PARP payment, an individual or legal entity must have an average adjusted gross income (AGI) of less than $900,000 for tax years 2016, 2017, and 2018. A person or legal entity whose average AGI for 2016, 2017, and 2018 exceeds $900,000, but whose 2020 AGI is $900,000 or less, must submit form FSA-1123 and provide a certification from a licensed CPA or attorney affirming the person’s or legal entity’s 2020 AGI is not more than $900,000 to be eligible for a PARP payment. With respect to joint ventures and general partnerships, this AGI provision will be applied to members of the joint venture and general partnership. AGI provisions are applicable to members of a legal entity, including a general partnership or joint venture who are at or above the fourth tier of ownership in the business structure. If a producer fails to provide FSA-1123, then the eligible producer’s payment will be reduced by the portion of a payment attributed to a member who exceeds the $900,000 AGI limitation or is otherwise ineligible for payment. Form FSA-1123 is available for download at farmers.gov/parp.

What is the funding source for PARP? 
 
Funding for PARP will be provided through the Consolidated Appropriations Act, 2021.  

Eligibility

Who is eligible for PARP?

You must have been in the business of farming to produce an agricultural commodity during any part of calendar year 2020 and must have suffered a 15 percent decrease in allowable gross revenue in 2020 compared to either 2018 or 2019. Producers or legal entities eligible for PARP are those who were entitled to a share in the agricultural commodity, or those who would have been entitled had the agricultural commodity been produced and marketed.

Additional eligibility requirements include legal ownership, average adjusted gross income, and conservation compliance provisions, among others. Visit farmers.gov/parp for a full list of program eligibility requirements.

Are contract growers eligible for PARP?

No. Contract producers are not eligible for PARP.

What is the definition of aquaculture?

Aquaculture means any species of aquatic organisms grown as food for human or livestock consumption or for industrial or biomass uses, fish raised as feed for fish that are consumed by humans, and ornamental fish propagated and reared in an aquatic medium. Eligible aquacultural species must be raised by a commercial operator and in water in a controlled environment.

What is the definition of hemp?

Hemp means the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis, that is grown under a license or other required authorization issued by the applicable governing authority that permits the production of the hemp.

Gross Revenue

What should be included when calculating my allowable gross revenue?

Allowable gross revenue includes all revenue a producer received on a “cash basis” during the applicable calendar year and reported to the Internal Revenue Service (IRS) on Schedule F or some other Federal tax form. Allowable gross revenue does NOT include costs or expenses associated with revenue generated by the farming operation.

Allowable gross revenue must have been received from the production or sale of an agricultural commodity including crops, aquaculture, livestock, livestock byproduct, or other animal or animal byproduct. The commodity must have been produced in the U.S. or produced outside the U.S. by a producer located in the U.S. and marketed in the U.S.

What specific items are included in allowable gross revenue?

You should include the following items when calculating your gross revenue:

• Sales of agricultural commodities you produced, including the portion of sales resulting from value added through post-production activities.
• Sales of agricultural commodities purchased for resale, less the cost or other basis of such commodities.
• The taxable amount of cooperative distributions directly related to the sale of agricultural commodities produced by you.
• Payments received under certain USDA programs (excluding the Coronavirus Food Assistance Programs 1 and 2 (CFAP 1 and 2), the Pandemic Livestock Indemnity Program (PLIP), the Spot Market Hog Pandemic Program (SMHPP) and 2020 Emergency Relief Program (ERP) Payments.
• Commodity Credit Corporation (CCC) loans reported under election if elected to be treated as income and reported to IRS.
• Crop insurance proceeds received from Federal Crop Insurance Corporation (FCIC) or a private plan of insurance regardless of crop year (as reported to IRS).
• Certain federal disaster program payments.
• Payments issued through grant agreements with FSA for losses of agricultural commodities.
• Revenue from raised breeding livestock.
• Revenue earned as a cattle feeder operation.  
• NOAA grants and State program funds providing direct payments for the loss of agricultural commodities or the loss of revenue from agricultural commodities; and
• Other revenue directly related to the production of agricultural commodities that IRS requires you to report as income.
• Pandemic Market Volatility Assistance Program (PMVAP) benefits received shall be included for 2020 “allowable gross revenue” purposes, regardless of the calendar year in which the payment was received. 

For a detailed description of allowable revenue, including where to identify these values on the IRS Schedule F, visit farmers.gov/parp.

Am I required to have filed a Schedule F to participate in PARP?

You are not required to have filed a Schedule F to determine Allowable Gross Revenue. If you did not file a Schedule F, you will use the applicable federal tax form filed to determine Allowable Gross Revenue in the same manner as if a Schedule F was filed.

Is there anything that should be excluded when I calculate my gross revenue?

The following items should be excluded from the calculation of your allowable gross revenue:

• Animals for consumption by the owner, lessee, or contract grower
• Wild free-roaming animals
• Horses and other animals used for racing or wagering
• Aquatic species that are NOT grown:
  • as food for human or livestock consumption,
  • for industrial or biomass uses,
  • as fish raised as feed for fish that are
    • consumed by humans, or
    • as ornamental fish propagated and reared in an aquatic medium.
• Cannabis sativa L. and any part of that plant including the seeds, thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent on a dry weight basis, that is grown under a license or other required authorization issued by the applicable governing authority that permits the production of hemp
• Timber
• Resale of items not held for characteristic change
• Income from a pass-through entity such as an S Corporation or LLC
• Conservation program payments
• Any pandemic assistance payments that were not for the loss of agricultural commodities or the loss of revenue from agricultural commodities
• Custom hire income
• Net gain from hedging or speculation
• Wages, salaries, and tips
• Cash rent
• Rental of equipment or supplies
• Certificate Exchanges

FSA will subtract any prior applicable pandemic assistance received, including Coronavirus Food Assistance Programs 1 and 2 (CFAP 1 and 2), Pandemic Livestock Indemnity Program (PLIP), the Spot Market Hog Pandemic Program (SMHPP) and 2020 Emergency Relief Program (ERP) payments. Therefore, income from these programs should not be included.

Producer Payments

How will PARP payments be calculated for eligible producers?

PARP payments are made when there is a 15 percent decrease in allowable gross revenue in 2020 compared to allowable gross revenue from 2018 or 2019 (whichever year you choose).

Payments will be based on your allowable gross revenue from 2018 or 2019 (whichever you choose), minus gross revenue from 2020, multiplied by 80 percent. If you are a beginning farmer or rancher, limited resource farmer or rancher, socially disadvantaged farmer or rancher or veteran farmer or rancher, this will be multiplied by 90 percent rather than 80 percent (the completion of certification form CCC-860 is required). FSA will then subtract any prior applicable pandemic assistance received, including Coronavirus Food Assistance Programs 1 and 2 (CFAP 1 and 2), Pandemic Livestock Indemnity Program (PLIP) and the Spot Market Hog Pandemic Program (SMHPP), and 2020 Emergency Relief Program (ERP) payments.

You may calculate your expected PARP payment using 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

What is the definition of a socially disadvantaged farmer or rancher?

A socially disadvantaged farmer or rancher is someone who is a member of a group whose members have been subject to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. Groups include: American Indians or Alaskan Natives, Asians or Asian Americans, Blacks or African Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.

For entities requesting to be considered socially disadvantaged, at least 50% of the interest must be held by socially disadvantaged individuals.

What is the definition of a limited resource farmer or rancher?

A limited resource farmer or rancher is a farmer or rancher that meets the criteria for both of the following:

• A producer whose direct or indirect gross farm sales do not exceed the amount identified in the Limited Resource Farmer/Rancher Self-Determination Tool in each of the two calendar years that precede the complete taxable year before the relevant program year (for PARP this would be 2017 and 2018), adjusted upwards in later years for any general inflation, and
• A producer whose total household income was at or below the national poverty level for a family of four in each of the same two previous years referenced above.

A limited resource farmer or rancher status can be determined through this self-determination tool: https://lrftool.sc.egov.usda.gov/.

For entities requesting to be considered limited resource farmer or rancher, all members must be a limited resource farmer or rancher.

What is the definition of a beginning farmer or rancher?

A beginning farmer or rancher is a person or legal entity for which both of the following are true for the farmer or rancher:

• Has not operated a farm or ranch for more than 10 years, and
• Materially and substantially participates in the operation.

For entities to be considered a beginning farmer or rancher, at least 50 percent of the interest must be beginning farmers or ranchers.

What is the definition of a veteran farmer or rancher?

A veteran farmer or rancher is a farmer or rancher who has served in the Armed Forces and who:

• Has not operated a farm or ranch for more than 10 years total, or
• Has obtained status as a veteran during the most recent 10-year period.

For entities requesting to be considered a veteran farmer or rancher, at least 50 percent of the interest must be held by veteran farmers or ranchers.

When are PARP payments expected to begin?

FSA will issue payments after the signup period has ended. USDA may prorate final payments or establish a lower maximum payment limitation if total calculated payments exceed the total funding allocated for PARP.

Is PARP a first-come, first-served program? Do I need to get my application in first to ensure there will be funding?

No. PARP is not a first-come, first-served program. FSA will not issue payments until after the signup period has ended. USDA may prorate final payments or establish a lower maximum payment limitation if total calculated payments exceed the total funding allocated for PARP.

Is there a payment limitation for PARP?

Yes. The total amount of PARP payments that a person or legal entity may receive, excluding general partnerships and joint ventures, is $125,000.

Payments to a program applicant that is a joint operation, including a general partnership or joint venture, cannot exceed $125,000 (or the reduced maximum payment limitation, if applicable) per person or legal entity that comprise first-level ownership of the general partnership or joint venture, unless the first level member is another joint operation.

USDA may prorate final payments or establish a lower maximum payment limitation if total calculated payments exceed the total funding allocated for PARP.

Learn more about PARP payment limitation and attribution of payments at farmers.gov/parp.

Can PARP payments be withheld to satisfy a debt?

No. These payments will not be subject to administrative offset. This means the payments will not be withheld to satisfy any USDA debts nor will they be offset by Treasury.

Are PARP payments going to be counted as taxable income?

The Farm Service Agency reports program payments to the Internal Revenue Service and program participants on a CCC-1099-G. This report is a service to help program participants report taxable income. Please consult with the IRS or your tax preparer for any additional questions on how this income impacts your business. 

 How to Apply

How can I prepare to apply for PARP?

A full list of program eligibility requirements and information on applying is available at farmers.gov/parp. We recommend you review this list before initiating your application.

Your local Farm Service Agency (FSA) staff will work with you to fill out the PARP application. Visit farmers.gov/service-locator to find contact information for the FSA office at your local USDA Service Center. FSA staff are available to support you in preparing your application. You may also call 877-508-8364 to speak directly with a USDA employee ready to offer assistance or answer any questions.

How do I apply for PARP?

You can apply for PARP through the Farm Service Agency office at your local USDA Service Center. Visit farmers.gov/parp for a full set of application requirements, including forms that will be needed to finalize your application. USDA staff are available to assist with every step of your application process.

Do I need to work with a third-party entity to complete my PARP application?

No. USDA helps applicants complete program applications and other paperwork free of charge. USDA Service Center staff can guide you through the process of preparing and submitting required paperwork to apply for PARP on your own, with no need to hire a paid preparer. Language translation services are available in all USDA Service Centers, so one-on-one assistance with a Service Center employee can be translated in real time for applicants requiring translations.

What documents do I need to submit with my PARP application?

The forms needed to complete your PARP application are available for download at farmers.gov/parp. These include the program application form – FSA-1122 – along with forms to confirm your personal information, confirm average adjusted gross income, and certify compliance with USDA conservation compliance provisions, among others. If requested by FSA, you may need to provide supporting documentation to support the gross revenue reported on your application.

What types of supporting documents may be required?

If requested by USDA, you must provide documentation to verify eligibility and the information included on the application, such as evidence that supports the gross revenue you certified to, including receipts, tax returns, and other documentation that is determined acceptable by USDA as valid evidence.

My local USDA Service Center is not open for walk-in service. How does this impact how I’ll submit my application?

We are committed to delivering USDA services while taking safety measures in response to the pandemic. Some USDA offices are open to limited visitors by appointment only. Service Center staff also continue to work with agricultural producers via phone, email, and other digital tools. Please call the Farm Service Agency office at your local USDA Service Center to schedule an appointment if you’d like assistance or have questions about applying for PARP.   

A call center is available for applicants who would like additional one-on-one support with the PARP application process over the phone. Please call 877-508-8364 to speak directly with a USDA employee ready to offer support. The call center can provide service to non-English speaking customers. Customers will select 1 for English and 2 for Spanish. For other languages, customers select 1 and indicate their language to the call center staff.

I’ve never worked with USDA’s Farm Service Agency (FSA) previously. How do I connect with my local FSA office to get started with my application?

There is a Farm Service Agency (FSA) office located in nearly every county across the United States. Visit farmers.gov/service-locator to find the contact information for your local office. We recommend you call your office to connect directly with FSA staff who can talk with you about the program, eligibility requirements, and how to apply. You may also contact our call center at 877-508-8364 to speak directly with a USDA employee ready to offer support. At USDA, we are here to make your application process as easy as possible and will provide support every step of the way.