A note about MPP from Dairy Herd Management:
While there was lots of publicity surrounding a request by Sen. Charles Schumer (D-N.Y.) for USDA to change the Margin Protection Program for Dairy (MPP-Dairy) premium payment system, USDA’s Farm Service Agency (FSA) is moving ahead based on current program requirements. That gives any dairy operations selecting buy-up coverage until June 1, 2015 to pay outstanding premiums.
Premium payment reminder letters will be mailed to affected dairy operations beginning May 1, according to a notice issued to state FSA offices. The letters will include the amount of outstanding premium due by June 1.
Under MPP-Dairy, dairy operations could pay 25% of margin insurance coverage premiums for calendar year 2015 last February, with the balance due June 1. According to USDA analysis, 13,860 dairy operations selected buy-up coverage, about 56% of all operations enrolling in MPP-Dairy.
Penalties severe
If premiums are not paid by June 1, those dairy farmers will remain legally obligated for the amount due. Their buy-up coverage will be lost, with 2015 coverage dropping to the catastrophic level ($4.00/cwt.) until the balance is paid in full.
If the outstanding premium is not paid by Sept. 1, 2015, the dairy operation will not be eligible for any coverage in the subsequent calendar year, and will not be able to receive the annual national production history upward adjustment. The operation remains legally obligated for the premium payment, and the annual $100 administrative fee for the duration of the five-year MPP-Dairy program.
After coverage is reduced to the catastrophic level, the original buy-up margin trigger level can only be regained when the premium is paid in full prior to Nov. 1, 2015, and only applies to remaining two-month payment periods in the calendar year. There will be no retroactive payments for pay periods already passed.
2016 enrollment
In addition to the premium payment letters, dairy farmers will also be receiving calendar year 2016 MPP-Dairy coverage selection letters by June 1. Dairy operations can select 2016 coverage levels and percentage of milk history to be covered, submitting that information to FSA between July 1 and Sept. 30, 2015.
Source:udel.edu