The Paycheck Protection for Producers Act helps farmers calculate their Paycheck Protection loan differently
By Diego Flammini
Lawmakers from both sides of the aisle are supporting a bill to help provide farmers more flexibility as they continue to navigate the COVID-19 pandemic.
The Paycheck Protection for Producers Act introduced in the senate by Sens. John Thune (R-S.D.) and Tammy Baldwin (D-Wis.) on June 9 allows farmers to calculate their Paycheck Protection Program (PPP) loans differently.
Rep. Ron Kind (D-Wis.), Glenn Thompson (R-Pa.), Anthony Brindisi (D-N.Y.) and John Joyce (R-Pa.) introduced the bill in the House of Representatives.
On April 24, the Small Business Administration and U.S. Department of the Treasury provided the following guideline for how individuals without employees should calculate their loan payments:
- Use the net income amount from 2019 (up to $100,000)
- Divide that number by 12 and multiply by 2.5
- Add the amount of any Economic Injury Disaster Loan (EDIL) made between Jan. 31 and April 3, 2020 that the borrower is looking to refinance, minus the EDIL advance.
But based on this calculation method, 37 percent of self-employed farmers wouldn’t have received a loan, Market Intel analysis reported.
If passed, the Paycheck Protection for Producers Act would let farmers use their gross income, up to $100,000, instead of net income, when calculating their loan amounts.
Producers are pleased lawmakers have taken action to ensure farmers can benefit from relief programs.
“It’s important that the rules for critical programs like the Paycheck Protection Program reflect that farms are often structured differently from businesses in other sectors,” Nic Schoenberger, a dairy farmer from Kiel, Wis., said in a statement. “I would like to thank Senators Baldwin and Thune for working to ensure that PPP rules can work for dairy farms like the one I run with my family in Wisconsin as well as the thousands of other farms across the country.”
Farms.com has reached out to producers for comment.