August 2, 2017

An Affordable MPP Could Ride on Shoulders of Large Producers

 |  By: Mike Opperman

There’s hope for the next Farm Bill to be out of committee by Thanksgiving, and with it potentially new tweaks to the Margin Protection Program (MPP). In the past, any new MPP changes were met with opposition, especially those that were not budget neutral.

Rep. Colin Peterson (D – Minn.), ranking House Ag Committee member, told Mike Adams on AgriTalk Tuesday that there’s still hope for a revised MPP program to make it through into the new bill. The real question is whether USDA can afford to make the changes.

One suggestion Peterson said he offered was to raise the premium paid by producers who shipped more than 4 million pounds of milk, and lowering premiums for dairies below 4 million pounds, as a way to help pay for the program. “I still think that’s the only way were going to get anything done,” he says. “But there are some people who don’t like that, big dairies subsidizing the smaller dairies.”

Almost all participation in the MPP program this year has been at the catastrophic protection level, and Peterson says that’s what big producers want. That opportunity would still be in place, Peterson says. “Most bigger producers have a way to hedge and take risk out of the system,” Peterson says. “With smaller producers that ability is not there,” and that’s something he says could be available with a revised MPP.

Protection for dairy within the Farm Bill goes beyond MPP, Peterson says, and extends to reforming the livestock gross margin program. “We’re looking at a number of different things and nobody really has the answer yet,” he says.

Peterson added his biggest concern with a revamped MPP is that too much risk is taken out of the system, which leads to unhindered production. “That’s some of the concern that big producers have that if we take all of the risk away from small producers that they could substantially increase production,” Peterson says. “And we have too much milk as it is.” On the other hand, Peterson says reforming the feed cost indicator will take risk away from bigger producers, which will bring more milk. “We need to make sure that whatever we do that we don’t have the government spiking the supply,” he says. 

Here’s Peterson’s AgriTalk interview, including his comments on the next Farm Bill and SNAP program revisions.