Emergency Relief Program Phase 2 covers losses to crops, trees, bushes and vines used in commercial agricultural production due to a qualifying natural disaster event in calendar years 2020 and 2021.
ERP Phase 1 occurred last summer and issued additional payments to producers who had received indemnity payments due to qualifying disaster events in 2020 or 2021 from Federal Crop Insurance. FCI data was used to calculate the initial payments.
Phase 2 intends to fill additional assistance gaps and cover eligible producers who did not participate in existing risk management programs from FCI or who did not have a qualifying loss base on their coverage levels under FCI programs. Grass for grazing, hay, and livestock are not eligible for ERP Phase 2.
This two-phased approach enables USDA to streamline the application process. However, while ERP Phase 1 was based on crop losses, the ERP Phase 2 will be a tax-based certification program that aids with producers who suffered a loss in revenue (income) due to necessary expenses associated with losses for eligible crops due to qualifying disaster events that occurred in 2020 and 2021.
In general, payments for ERP Phase 2 are based on the difference in allowable gross revenue between the selected representative benchmark year(s) and the disaster year(s).
Basically, either 2018 or 2019 income for benchmark year compared to 2020 and/or 2021 for disaster year income.
Some prep work will aid in the application process, including locating the supporting documentation that was used in creating the IRS Schedule F, as well as a copy of the FSA 1099 G used for reporting FSA payments made to IRS.
Benchmark revenue best represents a typical year of revenue for the farming operation, either 2018 or 2019. Disaster year revenue is actual revenue from the year(s) that the producer suffered an eligible loss.
Producers with eligible revenue losses in both disaster years 2020 and 2021 can be selected on the same supplication. The same benchmark year may be used for both disaster years. A disaster year loss can only be for that one year, 2020 or 2021. Disaster year revenue will, therefore, consist of consecutive years, 2020 or 2021.
Initial ERP Phase 2 payments will be limited to $2,000 until after the sign-up deadline of June 2, at which time as all eligible payments are known to USDA, a factor may be applied if qualifying payments exceed ERP funding levels.
All producers who received ERP payments are required by law to purchase crop insurance coverage for the next two available crop years at a coverage level of 60% or higher.
USDA’s Farm Service Agency began accepting ERP Phase 2 applications on Jan. 23, 2023, and will accept them through June 2, 2023. To apply for ERP2, contact the Tallahatchie FSA office at 662-647-8857, ext. 2.
