U.S. budget bill offers $1B in dairy subsidies

BURLINGTON — After Congress passed a massive budget deal in Washington, D.C., last month, Sen. Patrick Leahy, D-Vermont, was in the Green Mountain State touting a farming bill in the federal package that secured more than $1.1 billion in subsidies to stabilize the dairy industry.
Dairy farmers have seen their incomes steadily decline in recent years, and with milk prices at a 20-year low, there have been reports of farmers selling off their herds, or worse. Dairy co-op Agri-Mark earlier this year sent farmers the phone numbers for suicide prevention hotlines.
The new bill extends and expands the Margin Protection Program, which went into effect last year. Leahy said he worked with Senate Appropriations Committee Chairman Thad Cochran, R-Miss., to secure the new provisions.
“We were in session to about 3:30 a.m. this morning,” Leahy said. “We made sure to get in a great deal of help for dairy farmers. This is an example of the way the Senate is supposed to work. I said, it is staying in the bill or the bill is not going forward.”
The program provides a subsidized insurance plan if farmers lose money on milk production. Under the new bill, this safety net is made wider due to extended enrollment and lower premiums that will allow more small- and medium-sized farms to be covered. It also waives a $100 fee for farmers in the greatest need.
Leahy said the results of the bill would be felt by farmers “quickly.”
Bob Wellington, vice president of Agri-Mark, said at the press conference that there would be an education and awareness program that will get farmers ready to enroll as soon as legislation is officially passed.
“There is going to be no wait on the farmers’ part,” he said. “They need that money.”
Wellington said the bill would go a long way in keeping the struggling industry afloat until it could stage a recovery, as it did in the years after the 2008 recession.
While the bill is not going to raise farmers’ incomes to where they were years ago, he said they could now move ahead with a much-needed sense of stability, and most importantly keep their farms operating.
“The problem is once you lose a dairy farmer, you never get them back,” he said.
Some industry observers were not optimistic about the impact of the changes to the margin program. Among them is Andrew Novakovic, a professor in Cornell University’s College of Agriculture and Life Science’s Dyson School of Applied Economics and Management.
“The Margin Protection Program for Dairy Producers was created to provide insurance against market and pricing volatility,” said Novakovic, whose research focuses on the U.S. dairy industry and federal policy related to dairy. “While well intended, the program has not proven to be particularly helpful or effective, as dairy farmers have suffered below-average returns since 2015.”

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