The Risk Management Agency (RMA) issued a press release that would allow producers who previously purchased the Livestock Gross Margin for Dairy Cattle (LGM-Dairy) to now sign up for the Margin Protection Program for Dairy (MPP-Dairy) offered by the Farm Service Agency (FSA). The sign-up period is from March 25, 2019 though May 10, 2019.
Under the 2014 Farm Bill, producers who had purchased LGM-Dairy were ineligible for MPP-Dairy. The 2018 Farm bill revised the provision to allow producers to enroll in both LGM-Dairy and MPP-Dairy. The press release states that producers can retroactively enroll in MPP-Dairy for 2018. The retroactive sign-up is only for producers that had LGM-Dairy coverage in 2018 but did not receive a full year of MPP-Dairy coverage. FSA is to notify eligible producers and provide a one-time payment for all the months in 2018 that had margins triggering MPP-Dairy assistance.
ANALYSIS – This change will allow dairy producers to better meet their risk management needs. There may be a perception that this is double dipping but Congress expressly authorized participation in both programs. Historically, changes cannot be made to the policy after the contract change date, which was April 30, 2018. Such changes would be a violation of the policy and the principles of insurance. However, the preclusion against signing up for both LGM-Dairy and MPP-Dairy was contained in the rules of MPP-Dairy issued by the Farm Service Agency. Therefore, the contract change date is not an issue with LGM-Dairy the policy has not been revised.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.