A dairy insurance program designed to help farmers weather declining milk prices isn't working, and U.S. Sen. Kirsten Gillibrand thinks farms should get their money back.
Gillibrand, D-N.Y., announced legislation Monday that would refund premiums paid by farmers for the U.S. Department of Agriculture's Dairy Margin Protection Program. The program was established in the 2014 farm bill and replaced Milk Income Loss Contract payments.
The goal of the program is to provide payments to farmers when the dairy production margin is between $4 and $8 per hundredweight. But Gillibrand, a member of the Senate Agriculture Committee, said she is hearing from New York farmers who say the program isn't working.
Despite decreasing milk prices, which should trigger benefits for those who paid into the program, farmers reported receiving little, if any, support.
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Low milk prices can pose serious financial challenges for farmers. When prices fall, Gillibrand noted that farmers can't earn enough of a profit to maintain operations. They struggle to pay bills and cover payroll expenses. They are barely making enough of a profit from milk sales to pay for feed, she said.
"Our dairy farmers deserve better than this," Gillibrand said on a conference call with reporters.
Gillibrand proposed a short-term remedy to help dairy farmers. Her bill, the Dairy Premium Refund Act, would return unused insurance premiums to farmers. She said there are millions of dollars worth of premiums in the U.S. Treasury that aren't flowing to farmers in need.
A long-term fix could come in the next farm bill. The current farm bill is set to expire at the end of the year. The expiration of the existing dairy insurance program coincides with the farm bill's end date. Congress needs to either reauthorize the program or establishing a new insurance system for dairy farmers.
As congressional leaders begin drafting the next farm bill, Gillibrand called on New York farmers to press for better dairy insurance benefits.
"I urge our dairy community to keep raising your voices and speaking out about your need for relief and your need for a fair program," she said.
Online producer Robert Harding can be reached at (315) 282-2220 or robert.harding@lee.net. Follow him on Twitter @robertharding.