Legislation Clarifies Congressional Intent on PPP Eligibility for Farm Partnerships

Two new Farm Bureau-backed bills would make farm and ranch partnerships eligible for Paycheck Protection Program loans.

“The PPP is currently providing valuable assistance to many farmers and ranchers who are struggling to navigate financial challenges caused by the COVID-19 pandemic. But in a departure from congressional intent, not all self-employed farmers and ranchers can access this important program,” American Farm Bureau Federation President Zippy Duvall said in a letter to Reps. Ron Kind (D-Wis.) and Jeff Fortenberry (R-Neb.), sponsors of the Paycheck Protection Clarification for Producers Act (H.R. 1246).

Farm Bureau sent a similar letter to Reps. Jim Hagedorn (R-Minn.) and Henry Cuellar (D-Texas), sponsors of the PPP Flexibility for Farmers and Ranchers Act (H.R. 1411).

Among the improvements to the PPP included in last year’s Consolidated Appropriations Act of 2021 was a provision allowing self-employed farmers and ranchers who file a schedule F with their tax return to use gross income rather than wages to determine PPP eligibility and to calculate their loan amounts. This provision expanded PPP access to many farmers and ranchers. However, the Small Business Administration has been denying loans to self-employed farmers and ranchers who operate in a partnership or as sole-owner LLCs.

These bills would clarify what Farm Bureau believes was Congress’ intent – to allow all self-employed farmers and ranchers to access PPP loans.

Farm Bureau has also raised the issue with House and Senate Small Business committees.

“Congress intended to provide critical PPP assistance to farmers who are not paid wages and who have net operating losses. Unfortunately, SBA’s interpretation of this provision has significantly limited the relief that Congress intended to afford,” AFBF, the National Corn Growers Association and 30 other agricultural organizations wrote in a letter to Sens. Ben Cardin (D-Md.) and Rand Paul (R-Ky.), chair and ranking member, respectively, of the Senate Small Business and Entrepreneurship Committee, and Reps. Nydia Velázquez (D-N.Y.) and Blaine Luetkemeyer (R-Mo.), chair and ranking member, respectively, of the House Small Business Committee.