Struggling dairy farmers would get refunds to make up for a failed milk-pricing insurance program, under a plan proposed by U.S. Sen. Kirsten Gillibrand, D-N.Y.
Many of upstate New York’s 4,420 dairies paid millions of dollars into the U.S. Department of Agriculture’s Margin Protection Program, which is supposed to cover production losses when the price of milk falls or feed costs rise.
But Gillibrand says the program hasn’t paid out, despite all the large sums farmers put into it.
“I’ve heard from dairy farmers all over New York that the current dairy insurance program is not working,” she said. “Right now, our dairy farmers are in the midst of a serious financial slump through no fault of their own.
“Milk prices are now much lower than the cost it takes farmers to produce that milk, and farmers are struggling to pay their workers and bills.”
The Dairy Premium Refund Act she has proposed would return all the premiums farmers have paid. Farmers would automatically receive a check in the mail at the end of the production year for any insurance premium funds not used to pay claims to them during the previous year.
The bill proposes no new spending, would provide payments retroactively since the MPP program was implemented in 2015, and would apply to all future MPP program years, Gillibrand said.
New York Farm Bureau spokesman Steve Ammerman said, “The senator’s proposal underscores that the Margin Protection Program did not work for New York’s dairy farmers. It is important that we work to find a more flexible, reliable safety net in the 2018 Farm Bill that addresses the serious times farmers are facing with another year of low milk prices.”
Andrew Novakovic, Cornell University professor of agricultural economics, said, “While it was certainly well intended, MPP-Dairy has not proven to be a particularly helpful or effective support for dairy farmers, who have suffered below average returns since 2015. In its first two years of operation, farmers paid $96 million in fees and premiums, but only $12 million was paid in ‘indemnities’.”
Gillibrand’s proposal is the second initiative she has announced recently to help dairy farmers.
A proposed Dairy Farm Sustainability Act would establish a milk price floor of $23.34, which is the current cost of production. At present, however, farms are getting less than $17 per hundredweight for milk.
Under Gillibrand’s plan, farms would get 45 percent of the difference, up to the first 5 million pounds of milk they produce.
Source: Troy Record
