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The Dairy Premium Refund Act set to refund unused premiums paid by dairy farmers
February 7, 2018

An insurance program developed for U.S. dairy farmers in the 2014 Farm Bill has faced scrutiny for negatively affecting the population it was supposed to help, and Sen. Kirsten Gillibrand, D-N.Y., says that money should be returned to farmers.

On Monday, Gillibrand announced The Dairy Premium Refund Act, legislation that would retroactively refund unused premiums paid by dairy farmers from 2015 onward for the U.S. Department of Agriculture’s Dairy Margin Protection Program (MPP), a voluntary risk management program to offer protection to dairy farmers if the difference between the cost of milk and the average feed cost fell below a certain dollar amount.

When milk prices dropped after 2014, dairy farmers did not see money returned to them through the MPP. According to Gillibrand, the $100 million collected through MPP-Dairy is sitting in the U.S. Treasury.

“Dairy farmers deserve better than this,” Gillibrand said on a conference call Monday.

During the call, Gillibrand acknowledged the financial difficulty dairy farmers face because of high production and low costs. MPP, she argued, has done little of what it purportedly would do.

According to data compiled by the USDA, milk prices in the state have declined 30 percent over the past three years. New York farmers have seen little back to soften this loss.

The one-size-fits-all application of the program has been criticized before by New York farmers for its inability to account for smaller farms and regional cost differences. U.S. Rep. John Faso, R-Kinderhook, said in October that the MPP has been a “miserable failure.”

Gillibrand said the program doesn’t accommodate the differences in costs for each state, citing that New York grows the feed for its cows, unlike other states. Because the MPP uses national feed cost to determine pay out, breadbaskets such as the Midwest tip the averages, and farms in New York, where feed costs are higher, suffer from having a thinner margin.

According to Gillibrand, each farm pays more than $10,000 to have insurance through MPP.

Barb Hanselman, who runs Del-Rose Farms in Bloomville with her family, is supportive of the legislation if it puts this money back into the hands of dairy farmers.

“I very much support the idea that it should be paid out right now, and is it going to be a saving grace for all of us? No,” Hanselman said. “But if they hand those millions back to farmers, that’s the kind of money that may pay half of someone’s land taxes or put money in their pockets so that they can put corn feed in the ground.”

Hanselman referred to the program as it stands as a “tax on dairy farmers,” echoing former Rep. Chris Gibson, R-Kinderhook, who represented Faso’s district before declining to run for re-election in 2016.

Gillibrand promised to work toward fixing and replacing the current program in the 2018 Farm Bill. Reintroducing portions of the Milk Income Loss Contract, the risk management program that preceded MPP, was one solution she offered.

“I urge our dairy community to raise their voices and keep speaking out,” Gillibrand said. “The only way anything changes in Washington is if people demand it.”

 

Source: The Dailystar.com



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