N.Y. Sen. Urges USDA to Help Educate Dairy Farmers on Insurance Options

March 19, 2014

The recently-passed Agricultural Act of 2014 — also known as the 2014 Farm Bill — has a new dairy support program that is a significant improvement from the expiring Milk Income Loss Contract (MILC) program, said U.S. Sen. Charles Schumer (D-N.Y.).

But Schumer said the new program requires farmers to make more individual decisions when enrolling. He cautioned that many small dairy farmers may not have the time or resources to fully understand how to best use the new program before participating.

Speaking during his visit Monday to Van Althuis Dairy Farm in Sherburne, N.Y., Schumer urged the U.S. Department of Agriculture to prioritize Chenango County, N.Y., dairy farmers for farmer education funding, so that dairies can acclimate to the new program which is due to start no later than September.

Schumer said there is $6 million in the Farm Bill that is dedicated for technical assistance and outreach and should be prioritized for dairy farmers.

He urged the USDA to use the funds to educate and alert dairy farmers about the new margin insurance program and advise them on the best course of action.

Van Althuis Dairy Farm, where Schumer visited Monday, for example, previously participated in the MILC program and is very likely to participate in the new margin insurance program if they can get the adequate support and resources to do so, the senator said.

“The dairy industry is absolutely vital to Upstate New York’s economy and the new Farm Bill will help small dairy farmers across the state access affordable insurance policies through a new program this year,” Schumer said.

“While the new program will be an improvement over the previous system, the process will require dairies to make important decisions about their insurance, and I want to make sure the USDA is ready to help them every step of the way,” said Schumer.

“That’s why I’m asking them to ready their resources now and prioritize funds in the Farm Bill for technical assistance and outreach for dairy farmers like Van Althuis Dairy,” he said, “because many of these small farms don’t have the time or resources to fully understand how to best use the new program.”

Unlike the outgoing MILC program, which expires on Sept. 1, the new dairy insurance program instituted by the Farm Bill will require a more individualized registration process.

Schumer said dairy farmers will have to make decisions on how much of their historical output or base to cover and at what margin level to elect coverage under the new program.

These decisions will largely be based on each individual farmer’s business model; as a result, they will vary significantly. While the new program will require some adjustment, it will provide more accurate reimbursements once implemented, said Schumer. Furthermore, small dairy farms under 200 cows like Van Althuis will benefit from lower premiums.

This new insurance program could be a better safety net for these small dairy farmers, but only if they get the know-how from USDA on the best course of action, Schumer said. “So we want the feds to get ready long before September – when the new program goes into place – and devote significant online and in-person resources to helping dairies adjust.”

Schumer explained that Congress included a sizable pot of funding in the Farm Bill for the USDA to implement new programs, totaling $100 million.

Of that funding, $6 million is planned for technical assistance and outreach: $3 million for state extension services to work directly with farmers and $3 million for the creation of web-based tools to help farmers understand and take advantage of the new programs.

Schumer argued that dairy farmers will have to contend with an entirely new insurance program, and thus deserve to be prioritized for that technical assistance.

Because New York’s dairy farms are typically small farms, many lack the adequate time or resources to invest in an analysis of the new insurance program, Schumer said. He said the funding in the Farm Bill was passed with these types of farms in mind, and that the USDA’s resources should be used to provide the guidance and technical assistance these small dairy farmers need.

Source: U.S. Senator Charles Schumer’s office

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