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Opting out of MPP is Free, Sign-up Opens for 2018

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Sign-up for the Margin Protection Program (MPP) opens up on Sept. 1 for dairy producers to get coverage next year, and those who want to opt out for 2018 can do so at no charge.

USDA’s Farm Service Agency made the announcement on August 31 saying the opt out clause will give dairy producers more flexibility.

“Secretary Perdue is using his authority to allow producers to withdraw from the MPP Dairy Program and not pay the annual administrative fee for 2018,” says Acting Deputy Under Secretary for Farm Production and Conservation Rob Johansson. “The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants.”

In order to opt out producers shouldn’t sign up during the annual registration period. If a producer opts out they would not be eligible for MPP benefits should payments be triggered for 2018. Additional details will be included in a Federal Register Notice that will be released.  The decision would be for 2018 only and is not retroactive.

Industry groups and elected officials are praising the move by Secretary Perdue to allow dairy producers to opt out of MPP and give them more flexibility.

“As we work to improve the dairy safety net in the next Farm Bill, this is an important first step to ensuring producers have effective options to manage risk in the interim. I look forward to continuing to work with USDA to expand and improve coverage options for our dairy farmers,” says Senator Debbie Stabenow (D-Mich.), Ranking Member of the U.S. Senate Committee on Agriculture, Nutrition, & Forestry.

The American Farm Bureau Federation (AFBF) was happy with the announcement because dairies should have “effective risk management tools,” says Zippy Duvall, president, AFBF.

“Approximately 24,000 dairy farms, representing 80 percent of the U.S. milk supply, are currently enrolled in the program, however, this year only 2 percent of the milk enrolled participated at levels above the basic coverage option. The low participation rate is due to the poor performance of MPP in providing a viable safety net to dairy farmers,” Duvall says.

MPP has been disappointment to many dairy farmers in its current state, says Jim Mulhern, CEO and president of the National Milk Producers Federation (NMPF).

NMPF had previously asked that USDA allow dairy producers to opt out for the coming calendar year. Mulhern hopes the program can be fixed.

“Looking ahead, Congress must make more resources available to the MPP, so that the program provides a more effective, affordable safety net – one that provides support when farmers need it,” Mulhern says. “We are currently working with lawmakers to secure program improvements that will restore farmers’ faith in the value of the MPP. We also will continue to work with USDA and Congress to develop additional risk management options for dairy producers.”

Enrollment for coverage in the 2018 calendar year ends Dec. 15, 2017. A minimum administrative fee of $100 is required for participating farmers.

Appropriate forms can be sent via mail to a producer’s administrative county FSA office, along with applicable fees, without necessitating a trip to the local FSA office.

For those dairy farmers who do not want to participate in MPP there is still the option to utilize Livestock Gross Margin Dairy Insurance Program. Dual enrollment is not available.

For more information on MPP go to www.fsa.usda.gov/mpptool.

Additional information can be found by visiting FSA online at www.fsa.usda.gov/dairy or stop by a local FSA office to learn more about the MPP-Dairy. To find a local FSA office in your area, visit http://offices.usda.gov.

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