New option shows need to improve dairy policy in coming new farm bill
Dairy farmers can enroll for 2018 coverage in the Margin Protection Program (MPP) or they can choose to opt out of the program for 2018.
USDA Secretary Sonny Perdue decided dairy farmers should be able to withdraw from the MPP Dairy Program and not pay the $100 administration fee for 2018 if they do not wish to continue in the program. “The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants,” said Rob Johansson, acting USDA deputy undersecretary for farm production and conservation.
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. Enrollment for MPP coverage in 2018 begins today (Sept. 1) and runs through Dec. 15, 2017. The decision to opt out is for 2018 only and is not retroactive.
The decision was applauded by some dairy groups. Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), said MPP has been a disappointment for producers. NMPF had suggested earlier to USDA to allow farmers the choice of opting out of the program. The announcement, Mulhern said, “is a welcome development, in that it acknowledges the widespread dissatisfaction among farmers enrolled in the program. Simply put, the way the program was enacted in the 2014 Farm Bill, it does not meet the needs of America’s dairy farmers today, and declining participation levels amply illustrate farmers’ disenchantment with the MPP. Farmers who choose to opt out of the MPP will then be able to enroll in the Livestock Gross Margin program for 2018.” Mulhern added that Congress needs to provide more resources for the program to make it a viable safety net.
The American Farm Bureau Federation (AFBF) supported the decision. “Approximately 24,000 dairy farms, representing 80% of the U.S. milk supply, are currently enrolled in the program, however, this year only 2% of the milk enrolled participated at levels above the basic coverage option,” said Zippy Duvall, president of AFBF. “The low participation rate is due to the poor performance of MPP in providing a viable safety net to dairy farmers.”
Background. The voluntary program, 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. The MPP gives participating dairy producers the flexibility to select coverage levels best suited for their operation. Producers have the option of selecting a different coverage level from the previous coverage year during open enrollment.
