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Gillibrand says dairy insurance program fails farmers

Posted 5 February 2018 at 11:10 pm

Press Release, U.S. Sen. Kirsten Gillibrand

WASHINGTON, DC – U.S. Senator Kirsten Gillibrand today announced new legislation, the Dairy Premium Refund Act, to return insurance premiums to farmers who paid millions of dollars for an insurance program that left them empty-handed when milk prices plummeted.

According to the USDA Economic Research Service 2016 reports, New York State dairy farmers are a major economic driver in the state and produce more than $2.51 billion worth of milk per year on 4,420 farms across 53 counties.

“I’ve heard from dairy farmers all over New York that the current dairy insurance program is not working,” said Senator Gillibrand. “Right now, our dairy farmers are in the midst of a serious financial slump through no fault of their own. Milk prices are now much lower than the cost it takes for farmers to produce that milk, and farmers are struggling to pay their workers and their bills. The Dairy Margin Protection Program was supposed to help our dairy farmers in situations like this, but even though farmers have paid millions of dollars into the program, they’ve barely been paid out a dime. 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 are and deserve better than the raw deal they’re getting with the current dairy insurance program.”

The Dairy Margin Protection Program (DMPP) is the primary insurance option for dairy farmers when the price paid to farmers falls or feed costs rise. Thousands of New York dairy farmers paid millions of dollars to the USDA for this insurance, but when milk prices and feed prices fall at the same time as they did last year, farmers often lose money on every pound of milk they sell and few farmers receive an insurance payment.

Senator Gillibrand’s legislation would ensure that dairy farmers automatically receive a check in the mail at the end of the production year for any insurance premium funds not used to pay claims to them ‎during the previous year. Currently, these leftover funds are given to the U.S. Department of Treasury rather than to the farmers who paid them. This bill proposes no new spending, would provide payments retroactively since the DMPP program was implemented in 2015, and would apply to all future MPP program years.

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