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CONGRESS ASKS USDA TO IMPLEMENT DAIRY INSURANCE PROGRAM, WOULD PAY PRODUCERS $600 MILLION
Apr. 2, 2019
POLITICO reports:
Lawmakers are pushing the Agriculture Department to quickly implement the Dairy Margin Coverage insurance program in the 2018 farm bill, H.R. 2 (115), and Secretary Sonny Perdue has said enrollment will begin mid-June. But Congress' dairy rescue effort is seen as more of a short-term lifeline than a solution to long-term challenges in the sector.
Tough times: The dairy sector is entering a fifth year of low milk prices. Global oversupply and Trump's trade wars are weighing on producers, and Chapter 12 farm bankruptcies are on the rise in major dairy regions.
Rescue effort: The farm bill overhauled a previous dairy insurance program and effectively made it cheaper for smaller farms to buy policies that are more likely to trigger payments when the margin between milk prices and feed costs dips below a certain level.
Under the new system, USDA's Economic Research Service estimates that the government will send about $600 million to milk producers in 2019 - three times more than the previous Margin Protection Program paid out over three years.
The farm bill also included other dairy incentives. While plenty of dairy farmers are likely to take advantage of the programs, some say it will be just enough to tide them over for another year without addressing broader industry woes.
In dairy states like Wisconsin and Vermont, analysts have recommended tax breaks, research investments, a two-tiered milk pricing system and other measures to buoy the sector.
Calls for controversial supply management tools have gained little traction in Congress.
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