Producers who experienced revenue losses due to the coronavirus have oversubscribed a program authorized by the Consolidated Appropriations Act of 2021 to help the agricultural sector recover from those losses.

The Pandemic Assistance Revenue Program or PARP was created to provide payments to growers who had a 15% or greater loss for all or part of the 2020 calendar year compared to their revenues in 2018 or 2019.

Signup for the PARP, which had an adjusted gross income cap of $900,000 for the average of the 2016, 2017 or 2018 tax years or less than $900,000 for the 2020 tax year, began early this year and was scheduled to end June 2. USDA’s Farm Service Agency extended the deadline to July 14.

“Farmers submitted applications for the Pandemic Assistance Relief Program that exceeded the available amount of funding many times over,” said a USDA spokesperson. “As a result, USDA continues to process these applications and will make payments as soon as possible.

“We understand the need among many farmers right now, which the high volume of applications underscores, and we are moving quickly to administer resources to meet different circumstances through several different avenues, including but not limited to the Emergency Relief Program, PARP and the IRA section 22006 loan forgiveness options for those in financial distress.”

Payment allotments

The total amount of PARP payments that a person or legal entity may receive, excluding general partnerships and joint ventures, is $125,000. Congress allocated $250 million for the program, but applications could total $2.7 billion, according to USDA.

“As an additional note, to date, more than $1.6 billion in payments through the section 22006 program has helped more than 28,000 farmers and counting, in all 50 states, stay on their land, the spokesperson said. “USDA continues to examine additional circumstances to help farmers qualify for the program.”

The U.S. economy basically shut down when the pandemic hit the country in full force in March of 2020. Many Americans lost their paychecks when companies went into lockdown to try to prevent the further spread of the coronavirus. Multiple programs were begun to try to prevent the U.S. from slipping into a 1930s Depression.

“We have worked diligently to help agricultural producers bounce back from devastating natural disasters as well as the coronavirus pandemic,” said Agriculture Secretary Tom Vilsack. “No matter how well we design these targeted efforts, we often find some producers fall through the cracks or were harmed more severely than their neighbors.

“These new programs apply a holistic approach to emergency assistance – an approach not focused on any one disaster event or commodity but rather one focused on filling gaps in assistance who have suffered losses from natural disasters and the pandemic over the last few years.”

Facing foreclosure

One of those who is in danger of falling through the cracks is a Native American rancher facing foreclosure although USDA’s Farm Service Agency guaranteed the payment of her farm real estate loan.

The rancher, who has taken out non-USDA loans with high interest rates to try to save her ranch, has written FSA Administrator Zach Ducheneaux asking for clarification and information regarding the release of PARP payments by USDA.

“The USDA’s announcement of these payments with the vague statement ‘later this fall’ is far from satisfactory, and it hinders producers’ ability to make informed decisions about their operations and preparations for the upcoming winter months,” she said. “Or, in my case, avoidance of foreclosure while the lack of support to guaranteed borrowers through Section 22006 of the IRA continues.”

The rancher said she finds it concerning that while a government shutdown looms on the horizon, USDA appears to be prioritizing the swift issuance of Emergency Livestock Response Program payments, while the release of PARP payments “remains mired in uncertainty.”

(As this is being written, the House of Representatives and the Senate passed a stopgap bill to fund the government through January and February of next year on Nov. 14 and 15. President Biden was expected to sign the bill, averting a shutdown on Nov. 17. Leaders of some farm organizations have asked USDA to announce a moratorium on USDA direct and guaranteed loan foreclosures until the government funding becomes more certain in 2024.)

No funds received

“This rancher would have received 120% debt relief under the American Rescue Plan’s Section 1005 provisions,” said Kara Brewer Boyd, president of the Association of American Indian Farmers who has been working to help distressed borrowers keep their farms. “She hasn’t received a cent from the Inflation Reduction Act’s Section 22007 while fighting foreclosure.”

(The ARP’S Section 1005 was struck down by a federal court judge after some farm organizations claimed it discriminated against white farmers. Congress subsequently replaced Section 1005 with Sections 22006 and 22007 in the Inflation Reduction Act.)

While USDA has provided $1.6 billion in payments to FSA direct borrowers to bring them current on their loans, few guaranteed loan borrowers have received assistance. USDA has said it can’t comment on individual farm loan cases.

The rancher fell behind on her loan payments late last year and now owes AgWest Farm Credit more than $20,000. She said she sees a stark disparity between direct loan and guaranteed loan borrowers in relation to Section 22006 funds.

“Guarantees continue to be excluded from the extraordinary measures that have been used to help direct borrowers and do not receive equitable assistance,” she said. “I urgently request specific information about when the USDA plans to release the PARP payments. Clear and precise guidance on this matter is crucial for producers attempting to plan their next steps.”