Margin Protection Program Fix Costly

Dairy groups are asking Congress to tweak the dairy Margin Protection Program, but the fix may prove to be too costly. The House Agriculture Committee Wednesday reviewed the program while seeking options to make MPP more effective for farmers. The National Milk Producers Federation wrote Congress earlier this month suggesting changes to the program. Federation CEO Jim Mulhern testified that “while MPP was, and is, the right approach for the future of federal dairy policy, the program in its current form does not provide meaningful safety net support.” However, a fix could cost near $200 million a year, and the price tag is problematic for lawmakers. House Agriculture Committee ranking member Collin Peterson said the way that the Congressional Budget Office scores the MPP will cause budget problems for the next farm bill. Peterson says he doesn’t agree with the way the CBO scored the program in 2014, according to the Hagstrom Report. The CBO estimated such a high cost that Congress reduced the feed calculating formula under the program, leading to lower payments and participation. That means Congress has to come up with more money if it is to fix the program in the next farm bill.