March 7, 2017

Regional MPP Program Presents Challenges

 |  By: Anna-Lisa Laca

Revisions to USDA’s Margin Protection Program for dairy have long been debated. Some think the program should be scrapped entirely and others think it just needs some tweaking. Opinions aside, there’s no doubt dairy policy will be up for discussion during the next Farm Bill. House Ag Chairman, Mike Conway expects a full rewrite of dairy policy in the next farm bill.

Those working closely with the program say a simple formula change could make all the difference for producers.

“There’s a statutory formula in the farm bill that tells us how to calculate payments,” says Bradley Karmen, assistant deputy administrator of the Farm Service Agency. “They could change the formula that basically sweetens the payment. When margins shrink a little bit they could make the payment larger. It’s completely statutory driven.”

Some say the program should be revised to be more regional, but according to Karmen that’s really difficult for dairy unlike some row crop programs already in place.

“One of the problems with the margin protection program is there’s not a lot of good data,” Karmen says. “We don’t necessarily have good data on regional milk prices or feed prices.”

While he thinks it would be a challenge to regionalize the program, he says if Congress directs the Secretary of Agriculture to do a regional program for dairy, they will figure it out.

Watch the full story from our partners at AgDay TV below.