Farm and Ranch Risk Management Act

The Farm and Ranch Risk Management Act (H.R. 662) would allow farmers and commercial fishers to set aside up to 20 percent of their annual business income into tax-deferred savings accounts, known as FARRM Accounts. These accounts are designed to help producers manage the financial volatility of their industries by allowing them to save money during profitable years to cover expenses during lean years or after natural disasters.

For citizens in these industries, the bill provides a way to lower their current tax bill while building a self-funded safety net. To encourage the use of these funds for active risk management, the bill requires that money be withdrawn within five years of its deposit; otherwise, the distribution is subject to a 10 percent tax penalty. This measure aims to provide agricultural and fishing businesses with greater financial stability without relying solely on federal emergency bailouts.