Perdue opens enrollment for ‘new and improved’ dairy insurance program

Agriculture Secretary Sonny Perdue announced Tuesday that enrollment is now open for the “new and improved” Dairy Margins Protection Program, a dairy insurance program run by USDA. The program has a poor reputation among many dairy farmers, who believe funds from an earlier iteration of the program were misallocated.

The DMPP was passed as part of the 2014 farm bill and was intended to protect dairy farmers from fluctuating and falling dairy prices. Farmers pay an annual premium, and then receive a payout when the difference between the price of milk and the cost of feed falls below a certain amount.

In 2015, the DMPP collected $73 million in premiums but distributed just $700,000 in payments to farmers. The rest of the money was sent to the U.S. Treasury, a move that angered farmers who considered it a scam. In 2016, the USDA announced $11 million in payouts from the program, but farmers were still skeptical. According to a trade publication, those payouts would be distributed to fewer than 10 percent of dairy farms.

In response to farmers’ skepticism, and facilitated by the budget and disaster-aid package Congress passed in February, USDA reconfigured the program preceding yesterday’s relaunch. The updated program includes lower premium rates and an exemption for paying an administrative fee for “limited resource, beginning, veteran, and disadvantaged producers.”

New York Sen. Kirsten Gillibrand has spoken out against the reallocation of DMPP funds to the Treasury for several years. In February, she introduced the Dairy Premium Refund Act, which would return the undistributed premiums to dairy farmers instead.

Dairy prices have fallen consistently in the past several years, accompanying a milk glut that has put dairy farmers in an precarious position. Hundreds of dairy farmers have been dropped from their processors or marketing cooperatives, and there is a growing mental health crisis among dairy farmers whose livelihoods are diminishing.