WASHINGTON, Sept. 21 -- The National Milk Producers Federation board offered today to revise its dairy policy reform proposal by allowing a farmer the choice between accepting the margin protection of a government safety net program or taking a chance on the market.

In a news release this afternoon, NMPF said that it would suggest the change be made in legislation expected to be introduced in the House soon by Reps. Collin Peterson, D-Minn., and Mike Simpson, R-Idaho, which is based on NMPF’s “Foundation for the Future” plan.

Its original proposal called for an insurance-like mechanism called the Dairy Producer Margin Protection Program with a basic level of subsidized coverage plus an option of supplemental coverage partially paid by farmers. It also proposed a mandatory Dairy Market Stabilization Program to discourage new milk production during periods of compressed margins. The revised approach lets a producer elect to take part in both the margin protection and market stabilization programs or decide to opt out of both. If a producer chooses not to use the insurance program, then participation in the market stabilization program would not be required, NMPF said.

“By making some adjustments, we strongly believe that many of the concerns raised in the past year to our first approach now have been addressed and eliminated,” said NMPF CEO Jerry Kozak.

“Based on the feedback we received this summer from our cooperative membership, and during our grassroots tour, when 1,300 farmers came to 12 cities to talk with us about Foundation for the Future, we decided that a slightly different approach to reforming dairy policy was the best way to go,” said NMPF Chairman Randy Mooney, Rogersville, Mo. “Clearly, a number of farmers are uncomfortable about having a mandatory government program to manage milk production. So we are endorsing a new approach which gives farmers a clear choice.”

In a news release from NMPF, Mooney said, “This new approach of making the market stabilization program optional will appeal to those who philosophically do not want government telling them what to produce. At the same time, those who want the benefits of a government safety net must accept some government-led market stabilization as the price of that protection.”

NMPF also proposes to increase the basic plan’s coverage to 80 percent (rather than 75 percent) of a producer’s production history on margins between zero and $4/ cwt.; giving farmers the option of acquiring coverage for their production growth under the supplemental plan; collecting an administrative fee from producers who sign up for margin protection coverage; and eliminating the distribution of half of producer-generated funds to the Treasury under the market stabilization program, which had been a bone of contention for some opponents. The federation also wants to change its original proposal to reform federal milk marketing orders.

However, the proposed changes did not ease the opposition of processors, who would not have the option to decline to deduct producer assessments when the market stabilization system is in effect. If anything, according to an International Dairy Foods Association official, the producer opt-out provision could add new complexity because processors would be paying different prices for milk from producers who participate and those who have elected not to.


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