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November 7, 2017

Dairy Safety Net in Farm Bill Needs to Be Fixed

 |  By: Jim Dickrell

The dairy safety net, more commonly known as the Margin Protection Program, needs to be fixed in the next farm bill. So says Scott Brown, a University of Missouri dairy economist, who spoke with Tyne Morgan, U.S. Farm Report Host at the 2017 Milk Business Conference in Las Vegas this week.

“The thing we want is more participation [in the MPP],” Brown says. “And the last thing we want is a catastrophic situation to occur in the industry and nobody signed up.”

A number of options have been discussed, including reducing premiums or allowing dairy farmers to buy-up more coverage. Some have also proposed going back to the original feed coefficients in the milk-feed formula. “That would make feed more important and perhaps increase the likelihood of payments,” says Brown.

The one thing Brown says that is not being discussed is a more regional approach to the MPP. In the original debate over the MPP, some argued that the feed formula should be different in different areas to reflect regional differences. For example, some areas of the country such as the Midwest grow much of their own feed. But other areas, such as the West, purchase most of their feedstuffs. But Brown says this time around, he has heard less discussion on regionalization.

More of the debate has been on premium levels, buy-up coverage levels—some of which is based on adjusting for farm size, and feed formula changes.