The insurance-like dairy subsidy created in the 2014 farm law has been roundly criticized as a failure by farmers and dairy-state lawmakers. The USDA signaled its agreement, telling producers they can opt out of the Margin Protection Program for 2018, rather than remaining locked into it while Congress writes a new farm bill.
“Secretary (Sonny) Perdue is using his authority to allow producers to withdraw from the MPP-Dairy … The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants,” said acting deputy undersecretary Rob Johansson in announcing that sign-up for the program for 2018 will be from today through Dec 15. The National Milk Producers Federation and the American Farm Bureau Federation welcomed the opt-out. “It acknowledges the widespread dissatisfaction among farmers enrolled in the program,” said the dairy group.
The MPP was designed to shield producers from high feed costs or low milk prices by making a payment when the spread between income and feed costs narrowed. A base level of coverage costs $100 a year with greater levels of protection available at higher rates. Producers quickly decided the program provided inadequate coverage for its cost to them. Almost all of the farmers in the program are buying the cheapest level of coverage. The 2014 farm law said that once producers enrolled, they had to stay in MPP for five years.