GPs and JVs as Legal Entities Under ECAP: How to Track Partner Income and Protect Your Farm Payments

General partnerships (GPs) and joint ventures (JVs) have long been used by farmers to pool resources and share risk, especially under familiar programs like ARC or PLC. But with the new Emergency Commodity Assistance Program (ECAP), these structures face a significant twist: they’re now treated as their own legal entities.

This shift means your GP or JV must independently meet ECAP’s >75% farm income threshold, all while each individual partner does the same. It’s a logical shift in program requirements, yet it carries emotional weight—farmers want to avoid payment reductions and the stress that comes with unfamiliar rules. In this post, we’ll explore how to navigate the ECAP guidelines, track partner income with a simple spreadsheet, and maintain credibility by keeping your farm operations in compliance.

ARC/PLC vs. ECAP: Understanding the Difference

Under ARC and PLC, partnerships and JVs typically “look through” their members for payment limitations or AGI calculations. ECAP changes that. Now, the partnership or JV is considered its own legal entity, meaning it must satisfy program requirements itself—even before looking at each member’s individual qualifications.

Key Takeaways

• Entity-Level Responsibility: Your GP or JV must file Form CCC-943 to certify farm income.

• Individual Accountability: Each partner also files Form CCC-943, confirming they individually meet the >75% farm income threshold.

The >75% Farm Income Threshold

For ECAP eligibility, at least 75% of gross income must come from agricultural activity. This creates a new layer of complexity if a partner has substantial off-farm or investment income.

Important Note

• Certain revenues typically not considered farm income for tax purposes (like some government payments or cooperative distributions) do count toward farm income for ECAP.

Simple Spreadsheet for Partner Income Tracking

A straightforward spreadsheet can help each partner demonstrate compliance. Here’s what it might look like:

Partner Name   Farm Income   Non-Farm Income   Total Income   Farm Income %	Meets 75%?

Jane Smith	      $80,000	              $20,000	                $100,000	        80%	           Yes

Bob Johnson	      $50,000	              $40,000	                $90,000	        56%	           No

Use formulas to calculate totals and percentages automatically. This logical approach provides transparent evidence of compliance (or non-compliance), helping everyone in the JV or GP make informed decisions.

One overlooked partner could cost your entire operation thousands in lost assistance—are you willing to take that risk?

The new ECAP guidelines treat GPs and JVs as fully separate legal entities, making income tracking more critical than ever. By understanding how the >75% farm income threshold applies at both entity and individual levels—and using a simple spreadsheet to track each partner’s contributions—you’ll maintain confidence in your compliance. This approach appeals to your sense of logic, secures your farm’s future, and upholds your credibility as you navigate these new rules.

We’d love to hear from you. Have questions or insights on how GPs and JVs can adapt to ECAP’s new rules? Leave a comment below, or share this post with fellow farmers who might benefit from a clearer understanding.