USDA is seeking input from the public (particularly dairy farmers) about the production history rules under the new Margin Protection Program Question: Should rules be more flexible in the future to accommodate intergenerational transfers or adult children returning to the family farm?
The sign-up period for the new Margin Protection Program (MPP) for dairy farmers is now underway. Between now and Nov 28, 2014, those farmers who wish to participate in the MPP in 2014 and/or 2015 need to contact their local FSA offices to do so.
Based on the parameters for the new program established by Congress in the 2014 Farm Bill, a producer’s production history is the farm’s highest production from the years 2011, 2012 or 2013, plus a small annual increase based on the national average production increase from the previous year. The reason this is important is that a production history establishes a limit on how much of a farm’s production can be covered under the MPP. An operation cannot cover more than 90 percent of their production history under the program. (However, the production history does NOT in any way place limits on a farm’s production, only on the amount of milk eligible for coverage under the MPP.)
In other words, except for new farms, a farm’s production history is already established based on past production. The reason for this is that Congress did not want the new program to be counterproductive, by encouraging an increase in production that would ultimately drive down milk prices.
However, when USDA announced the details of the new program and established the registration process, they also invited stakeholders (particularly farmers) to provide comments about whether USDA should provide more flexibility in the production history rules to address the needs of family farmers and intergenerational transfers. If USDA were to make changes in this regard, it would only apply for coverage starting in 2016, not before.
Farm Service Agency (FSA) Statement and Specific Questions:
“The 2014 Farm Bill provisions regarding MPP-Dairy and the rule do not address the establishment of additional production history for a participating dairy operation in specific instances, such as an inter-generational transfer or when a family member joins a participating dairy operation. Other statutory provisions of MPP-Dairy do suggest that Congress intended to benefit smaller dairy operations, which tend to be family owned and operated. These provisions include the establishment of lower premium rates for insured annual production of less than 4,000,000 pounds. This rule does not take into account the size and structure of the dairy operation in determining whether the operation can adjust its production history to assist small, family dairy operations, especially with intergenerational transfers of the operation. FSA invites interested parties to address whether the regulation should be amended to authorize the establishment of additional production history, and if so, whether limitations should be imposed on any increases. Specifically, FSA requests comments on the following questions; please include any data that supports your comments:
1. Does the provision in the rule regarding transfers of production history hinder intergenerational transfers of dairy operations? If so, how?
2. How would you suggest the rule be amended to accommodate intergenerational transfers or adult children who want to join their parent's dairy operation and obtain additional production history for the dairy operation?
3. If additions to production history based on intergenerational transfers or adult children joining family dairies are allowed, should there be a cap on the overall amount of production history that cannot be exceeded or a percentage or quantity limitation on the amount by which the production history could be increased per participating dairy operation under this provision? If so, what amount?”
Comments on these questions are due to USDA by October 28, 2014, and can be submitted in the following ways:
Electronically, via the following link: http://www.regulations.gov/#!documentDetail;D=CCC-2014-0009-0001. Click on the blue “comment now” button on the upper right hand corner once you have gone to this link, and you can either type in your comments directly or attach a file with your comments.
By Mail, send to: Danielle Cooke, Special Programs Manager, Price Support Division, FSA, USDA, STOP 0512, 1400 Independence Ave. SW., Washington, DC, 20250-0512.
Margin Protection Program
USDA has announced details of the Margin Protection Program (MPP), which was authorized through Dec. 31, 2018, by the 2014 Farm Bill. MPP replaces the Milk Income Loss Contract (MILC) program. The new voluntary program allows producers the opportunity to select coverage based on the needs of their individual operations. The program was developed to provide risk protection for periods when the difference between the all-milk price and the average feed cost drops below a certain level specified by the participating producer.
The initial sign-up period for producers to get coverage under the MPP for 2014 and 2015 will begin on September 2 and end on November 28, 2014. Producers interested in participating in the new program should visit their county Farm Service Agency (FSA) office to sign up.
Additional MPP program information, including details of informational meetings throughout the region, can be found by clicking on the various links below:
Fact Sheet - MPP
This USDA-FSA document provides key information on the program, including eligibility, registration, production history establishment, coverage election, premiums, margin calculations, payments, contract modifications and how to find more information.
FAQ - MPP
This document in Q/A format answers more than 50 of the most common questions surrounding the new MPP program.
Additional archived documents related to development and implementation of MPP can be found here.
About the Midwest Dairy Coalition
The Midwest Dairy Coalition consists of farmer-owned cooperatives acting on behalf of the region's dairy producers to shape federal policy impacting the Midwest dairy industry.
For nearly 20 years, the Midwest Dairy Coalition has worked to ensure the region's dairy producers have a strong and respected voice with policymakers in matters of federal dairy policy. The Midwest Dairy Coalition is the longest continuously operating organization of its kind in the region and has built a solid reputation in our nation's capital as a knowledgeable representative for the region's dairy industry.Learn more.
Dairy cooperatives are owned by the dairy producers they serve. They provide a number of services for their member-owners, from manufacturing and marketing dairy products made from members' milk to providing insurance and other benefits to promoting dairy product consumption.