NY Senator Introduces Bill To Refund Farmers Dairy Margin Protection Program Premiums

Feb 6, 2018

New York U.S. Senator Kirsten Gillibrand is promoting legislation that would return to dairy farmers premiums paid into a program intended to be a safety net when milk prices to producers plummet.  The Democrat says farmers have never benefited even though milk prices have been dropping since the program was implemented.

The Dairy Margin Protection Program was implemented in 2015.  Dairy farmers buy insurance coverage that pays out when milk prices fall or feed costs rise above certain margins.
Senator Gillibrand, a Democrat, says the insurance program has failed.  “Not only is the program failing to pay our farmers when they’ve suffered enormous losses because milk prices have dropped so low, but our farmers were stuck paying into this program for the last two years if they wanted even the most minimal protection despite the fact that this program barely paid out a dime.”

Gillibrand is introducing the Dairy Premium Refund Act to rectify the situation.  “Dairy farmers in New York need relief now.  My bill would return the money that farmers have paid into a program that’s just not working.  Right now millions of dollars that our farmers paid to the program are just sitting in the U.S. Treasury. This bill would put all of those unused insurance premiums back into the pockets of our dairy farmers who work day and night to provide milk for our families and got a raw deal with this program.”

Gillibrand claims there is about $100 million sitting in the Treasury that could be returned to farmers.  “Each farm spends about  over $10,000 so it’s 10, 20-thousand dollars for this kind of insurance.  Only a few thousand dollars were paid out in New York state in ’15 and less than a million was paid out in 2016. Nothing or negligible amounts were paid out in ’17. And it’s largely because our farms are smaller.  But also the formula for payouts has to do with feed prices going up and we often provide our own feed so the formula just doesn’t work for the finances of our farms.”

New York Farm Bureau Spokesman Steve Ammerman says Gillibrand’s refund plan is nice but only ranges between a few hundred to a couple thousand dollars per farm.  "It was money going to a program that really hasn’t worked like it was intended to so it would be nice for them to be able to get that money back.  We’d certainly be supportive of that.  You know in the big picture it wouldn’t dramatically impact the bottom line of their farm but certainly it would be helpful at a time when milk prices are so low.  Milk checks came in last month and they saw less money in their milk checks than they had the previous month.  And it’s very frustrating.  And you’re seeing debt increase. And there’s a lot of stress out there on the countryside over milk prices and it doesn’t seem like there’s anything that’s going to change in the short term to reverse that trend.”

Gillibrand plans to fix or replace the current Dairy Margin Protection Program in the 2018 Farm Bill, which is scheduled to be introduced in the House at the end of February.