WASHINGTON, Aug. 31, 2017 — Bowing to requests from the dairy industry, USDA says it will allow milk producers to opt out of the Margin Protection Program for 2018.
Agriculture Secretary Sonny Perdue “is using his authority to allow producers to withdraw from the MPP Dairy Program and not pay the annual administrative fee for 2018,” Rob Johansson, acting deputy undersecretary for Farm Production and Conservation Rob Johansson, said in a release. “The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants.”
MPP, established by the 2014 farm bill, provides financial assistance to participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the producer.
Jim Mulhern, president and CEO of the National Milk Producers Federation, welcomed USDA’s action.
“The MPP in its current form has been a disappointment to many dairy farmers, which is why NMPF has been working both with USDA and Congress to make significant improvements to the program,” Mulhern said in a release. “Given this level of dissatisfaction,” he said, NMPF had earlier suggested to USDA that farmers be allowed to withdraw from the program for the coming calendar year.
Zippy Duvall, president of the American Farm Bureau Federation, pointed out that approximately 24,000 U.S. dairy farms, representing 80 percent of the U.S. milk supply, are currently enrolled in MPP. But he said that this year, only 2 percent of the milk enrolled participated at levels above the program’s basic coverage option.
“This low participation rate is due to the poor performance of MPP in providing a viable safety net to dairy farmers,” Duvall said in a statement on the group’s website.
Duvall said AFBF and its grassroots members are looking forward to working with USDA and Congress to “enhance the dairy safety net.”
Sen. Debbie Stabenow of Michigan, the top Democrat on the Senate Agriculture Committee, praised Perdue for for allowing new flexibility for dairy farmers enrolled in MPP.
“I applaud Secretary Perdue for providing additional flexibility for our dairy farmers,” Stabenow said in a statement. “As we work to improve the dairy safety net in the next Farm Bill, this is an important first step to ensuring producers have effective options to manage risk in the interim. I look forward to continuing to work with USDA to expand and improve coverage options for our dairy farmers.”
Details about the withdrawal option were included in a release by USDA’s Farm Service Agency announcing the Sept. 1 starting date for producers to enroll for 2018 coverage.
MPP-Dairy gives participating producers the flexibility to select coverage levels best suited for their operation, AMS said. Enrollment ends on Dec. 15, 2017, for coverage in calendar year 2018. Participating farmers will remain in the program through Dec. 31, 2018, and pay a minimum $100 administrative fee for 2018 coverage. Producers have the option of selecting a different coverage level from the previous coverage year during open enrollment.
To opt out, a producer should not sign up during the annual registration period. By opting out, a producer would not receive any MPP-Dairy benefits if payments are triggered for 2018. Full details will be included in a subsequent Federal Register Notice, FSA said. The opt-out decision would be for 2018 only and is not retroactive.
USDA has a web tool to help producers determine the level of coverage under the MPP-Dairy that will provide them with the strongest safety net under a variety of conditions. FSA says the online resource, available at www.fsa.usda.gov/mpptool, allows dairy farmers to quickly and easily combine unique operation data and other key variables to calculate their coverage needs based on price projections.
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