COLUMBUS, Ohio — After months of challenging negotiations on Capitol Hill, President Donald Trump signed into law a budget deal that includes provisions that will reform the dairy safety net into a more effective resource for farmers facing 2018’s challenging milk price environment.
The Bipartisan Budget Act of 2018 (H.R. 1892) sets federal spending levels for the next two years, but most critical to the dairy community, it contains policy changes affecting the Margin Protection Program and other dairy risk management programs within the Agriculture Department.
These changes will help provide more financial resources for the federal dairy program heading into the 2018 Farm Bill, and will increase the prospects of timely and productive final legislation.
Specifically, the dairy package will:
- Adjust the first tier of covered production to include each farm’s first 5 million pounds of annual milk production (about 217 cows) instead of 4 million pounds, a recognition of the growth in herd sizes across the country.
- Raise the catastrophic coverage level from $4 to $5 for the first tier (5 million pounds) of covered production for ALL dairy farmers.
- Reduce the premium rates for every producer’s first 5 million pounds of production, to better enable dairy farmers to afford the higher levels of coverage that will provide more meaningful protection against low margins. No changes were made to the second tier of premiums.
- Modify the margin calculation to a monthly basis to make the program more accurate and responsive to producers in difficult months.
- Waive the annual $100 administrative fees for “underserved” farmers, defined as those who meet certain criteria defined by the Agriculture Secretary, including limited resource, beginning, veteran or socially disadvantaged farmers.
- Direct USDA to immediately reopen the program signup for 2018.
- Remove the $20 million annual cap on all livestock insurance, including the Livestock Gross Margin-Dairy program. This will allow USDA to develop and/or approve additional risk management tools for dairy producers that can complement MPP-Dairy.
ODPA was engaged with the National Milk Producers Federation as it worked closely with Ohio’s members of Congress to secure these improvements to the MPP, as well as expanded access to risk management tools for dairy producers. Because of the budget challenges presented by the upcoming Farm Bill, a supplemental spending bill containing disaster assistance funding was a unique opportunity to enact these much-needed changes.
— Ohio Dairy Producers Association