WASHINGTON, Nov. 19, 2016 - Dairy lobbyists are going to go on the offensive early next year, pushing lawmakers to pass legislation that would strengthen the Margin Protection Program (MPP) – the safety net program they got in the 2014 farm bill.
Randy Mooney, chairman of the National Milk Producers Federation, told Agri-Pulse he knows it will be an uphill battle to get Congress to open up the farm bill, but he also stressed the need from producers who feel they are paying into a program that isn’t supporting them.
Dairy farmers didn’t bring their pitchforks with them to the industry’s annual convention last week in Nashville, but they are angry and disappointed with the MPP.
“We don’t like MPP. MPP is not working. Thank you very much.” Those were the opening lines from Jaime Castaneda as he addressed several hundred attendees at the annual joint meeting of the National Milk Producers Federation, the National Dairy Promotion and Research Board, the National Milk Producers Federation and the United Dairy Industry Association.
It was a light-hearted approach that generated both laughter and applause, but Castaneda, NMPF’s senior vice president of strategic initiatives and trade policy, followed up quickly with a promise that NMPF will get Congress to improve the MPP.
NMPF President and CEO Jim Mulhern also said he was disappointed with the initiative. “The safety net hasn’t lived up to its potential,” Mulhern in a speech at the conference.
There was a lot of agreement to that at the gathering. More than one attendee stood up to complain about the MPP, a complex risk management program that pays out when producers are squeezed by low profit margins. The problem, farmers say, is that the calculations for feed costs are not realistic and MPP just doesn’t pay out enough to make participation worthwhile.
The potential of the dairy safety net was restricted when John Boehner, who was the speaker of the House when the 2014 farm bill was written, opposed the original version that was contained in the Dairy Security Act.
Long before the MPP was drafted, the dairy sector stood united behind the proposed Dairy Security Act, which contained the Dairy Market Stabilization Program and the Dairy Producer Margin Protection Program and the Federal Milk Marketing Order System. But Boehner and some others railed against what they said was a “supply management” program that could temporarily put a stop to milk production when farmers suffered low profit margins.
Mooney, Castaneda, Mulhern and other leaders say they are not advocating a whole new safety net for farmers, but rather improving the MPP.
“We believe that the Margin Protection Program is the right program for dairy farmers, but it’s not working the way we intended it to,” Mooney said. “It’s not working the way we presented it to Congress in the Dairy Security Act.”
To get the MPP right, NMPF has convened a new economic policy committee and tasked it with rewriting the program to make it stronger. The committee met for the first time last week when it received input from congressional staff members.
The plan, Mooney told Agri-Pulse, is for the committee to continue meeting and then present a final product to the NMPF board of directors in March. If it gets a thumbs-up, Mooney said, NMPF already has promises from some lawmakers that they will begin trying to attach it to legislation. If that doesn’t work, Mooney said, “plan B” is the 2018 farm bill.
“We’re going to be pushing early next year for Congress to start work, whether it’s on the farm bill process or any other package where we can reform MPP,” said Paul Bleiberg, NMPF’s senior director for government relations. “There is some resistance … to opening up the farm bill before it expires and that always exists in certain corners, but I think from the dairy perspective … there is going to be a strong vocal desire to get the process going very early.”
Farmers are impatient and the stakes are high. Castaneda told farmers at the Nashville convention that if a key feed-price adjustment had not been changed during 2014 farm bill negotiations, farmers would have gotten a lot more support from the MPP.
“The No. 1 problem was that because we were battling a number of different fights within the farm bill, we actually got this cut to our feed index,” Castaneda said in his speech. “That feed index was something that we spent a lot of time developing.”
The MPP paid out $11.2 million in August. Dairy and other farm groups were quick to thank the USDA for making the payments, but also stressed that the MPP had to be changed to better reflect the true cost of livestock feed and other inputs.
“This year, if we would have had the same signup that we had in 2015, we would have seen payments of $145 million to farmers,” Castaneda said. “We would be having a different conversation if we would have had the original … Dairy Security Act.”
Farmers need better support, Mooney said, but he warned NMPF members and others at the convention that they should not expect too much.
“This can’t be a program that guarantees profit,” he said. “If it does, we’ll have way too much milk. This has got to be a program that protects our balance sheets, our assets, against catastrophic loss. So if you’re expecting it to be a profit program, you’re going to be disappointed. That’s not what it’s intended to be.”
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