Senator calls for reimbursing farmers for flawed insurance program
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Sen. Kirsten E. Gillibrand wants the federal government to reimburse dairy farmers who paid more money than they received from the Margin Protection Program.
The senator, D-N.Y., announced Monday that she has introduced the Dairy Premium Refund Act of 2018. The act, if adopted into law, would require the U.S. Department of Agriculture to pay producers an amount equal to the money they spent subtracted from the funding they received and the department’s operational expenses.
These reimbursements would apply for every previous and consecutive calendar year since 2015.
“The Dairy Margin Protection Program was supposed to help our dairy farmers…, but even though farmers have paid millions of dollars into the program, they’ve barely been paid out a dime,” Sen. Gillibrand said in a statement. “My 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 deserve better than the raw deal they’re getting with the current dairy insurance program.”
The insurance program was introduced in the 2014 Farm Bill to provide farmers financial assistance when the margin — the difference between milk prices and feed costs — falls below their selected level of coverage.
Farmers and elected officials like Sen. Gillibrand have criticized the program for years, saying it failed to provide enough revenue to justify the administrative fees. The senator previously said the program in 2015 garnered $73 million in payments from farmers while only providing about $700,000.
Producers who participate in the program have to remain enrolled through 2018 and pay a minimum $100 administrative fee each year.
Steve Ammerman, New York Farm Bureau manager of public affairs, said in a statement that the organization supports the senator’s efforts to help farmers as they work through another year of low milk prices.
“Her proposal underscores the bigger picture of needing to reform the Margin Protection Program,” he said. “It is clear by low participation numbers that MPP is not an effective safety net during these difficult times nor has it addressed regional differences across the country.”