BREAKING: Leahy Secures Key Safety Net Changes For Dairy Farmers In Budget Deal
U.S. Senator Patrick Leahy announced Thursday that he has secured significant improvements to a key dairy safety net program, which are to be included in a bipartisan budget deal package to be considered by Congress this week. Leahy is the Vice Chairman of the Senate Appropriations Committee and has been working with the panel’s Chairman, Thad Cochran (R-Miss.), to address the needs of dairy and cotton farmers struggling with low prices. Leahy also is a leading member of the Senate Agriculture Committee, where he has long led on dairy policy issues.
The bipartisan agreement makes substantial improvements to the Margin Protection Program (MPP) for dairy farmers, and it would take effect immediately upon becoming law. Effective for calendar year 2018, the changes would direct the Secretary of Agriculture to reopen the signup period for the MPP and offer farmers an important new chance to select meaningful levels of risk protection at more affordable rates. For some family dairy farms, protection costs could drop by 70 percent or more.
Leahy said: “Making these crucial investments and key changes with immediate effect will help stave off setbacks for dairy farmers who are facing another difficult year without access to meaningful risk management protection. The dairy forecasts for this Spring are deeply troubling. From talking with dairy leaders in Vermont, I know that without immediate changes to protect farmers in these difficult times we will be facing a crisis situation.”
To further improve the effectiveness of the MPP, the Leahy-authored proposal will also provide that the program-backed benefit is calculated monthly, rather than averaged every two months. This will make the program more responsive to farms that must meet important monthly financial requirements.
The dairy proposal also benefits dairy farmers and livestock producers by repealing a cap on subsidies and operating costs for livestock insurance policies. This $20 million statutory annual limit has severely restricted dairy farmers’ access to the Livestock Gross Margin for dairy and has prevented companies from developing new, innovative insurance products.
Last year, Leahy urged Agriculture Secretary Sonny Perdue to classify milk as a distinct agricultural commodity, and thus be eligible for federal crop insurance coverage. Perdue, however, did not act on the request. Eliminating this cap will allow for more companies to develop innovative insurance products for dairy farmers.
The proposal must now be adopted by the full Senate, passed by the House and signed into law by the President.
The Leahy-led dairy provisions make six specific changes:
- Directs the Secretary of Agriculture to immediately reopen the sign-up period for calendar year 2018 for the Margin Protection Program (MPP) to allow farmers to reevaluate the costs and protections the program can now provide their farm.
- Immediately moves the MPP calculations and potential payments to a monthly basis (currently bimonthly) to improve the accuracy and timeliness for helping farmers.
- Immediately cuts the premium costs for Tier I enrollment by nearly 70 percent to incentivize producer participation at meaningful levels of protection and makes that change this year.
- Raises the Tier I threshold level corresponding to substantially lower premium costs to the first 5 million pounds of production (nationally equivalent to 220 cows), up from the current level of 4 million pounds of production (nationally equivalent to 175 cows). This will better align the program with the median U.S. dairy farm size, 223 cows, and encourage more family farms to participate and secure meaningful levels of protection to offer an effective farm safety net.
- Waives $100 administrative fees for underserved producers, bringing the program in line with other USDA programs with similar service fee waivers.
- Repeals the unfair statutory cap for the USDA’s underwriting costs for livestock insurance products.
Farm Women United
P.O. Box 113
Laceyville, PA 18623
“Taking Back Our Food Supply, One Farm Policy Project at a Time”
February 26, 2018
The Honorable Patrick Leahy
437 Russell Senate Building
Washington, DC 20510
Dear Senator Leahy,
Farm Women United, a grassroots association of farm women concerned about public food policies, wishes to respond to your February 8, 2018, press release which lauds your success in securing “significant improvements to a key dairy safety net program.”
This alleged “safety net” Margin Protection Program for Dairy (MPP-Dairy) took $100 million from farmers in 2015-2016, while paying out a mere $12 million during the same period. We are not aware of the 2017 figures, but we know that the payouts were insignificant. From 2015 through 2016, farmers who participated in this “safety net program” lost $88 million on top of their already significant losses due to low farm milk prices. To add insult to injury, farmers who got scammed were not allowed to exit the program, until recently, and only after the scam was so blatantly obvious that even the proponents of the MPP-Dairy had to admit that it was not working.
What you have done, Mr. Leahy, is move deck chairs around on a sinking ship. This may result in a higher percentage payback from an insurance program but does absolutely nothing to address low farm milk prices, which have---and will continue to do so---wiped out small and mid-size dairy farms from the rural landscape, along with the culture and communities of which they were such an integral part.
The reasons for this disaster are not a mystery. Milk Protein Concentrate (MPC) and Ultra-filtered milk are being widely used to displace REAL farm milk and traditional dairy ingredients from milk and dairy processing plants and to extend cheese yields. The school lunch program skim milk, which is devoid of healthy levels of butterfat by federal fiat, is turning off the next generation of milk drinkers. The “dairy industry”, Land Grant Universities, and lending institutions, all relentlessly promote dairy expansion. Trade agreements have already stripped American farmers of any protection and seek to strip all farmers, worldwide, of any safeguards. The United States Congress has been, at least, complicit in this disaster, and now, even you, Mr. Leahy, claiming to be a leader on dairy policy issues, have capitulated to the global agenda, where WTO rules supersede our own rights to maintain a local and diverse domestic food supply. We are not fooled by your assertion of “significant improvements,” as you have clearly joined the ranks of those who are willing to see traditional family dairy farms forever disappear from the rural, American landscape.
Chairman of Policy Development
Farm Women United