Milk money

US - Long-term help instead of “quick fixes” — for Massachusetts’ struggling dairy farmers could be on the horizon, according to the Romney administration, which has taken it on the chin this year for ignoring dairy farmers in distress.
calendar icon 5 November 2006
clock icon 2 minute read

According to the state Department of Agriculture, the Federal Crop Insurance Board will review a new program in January that would provide local dairy farmers the option of purchasing government-subsidized insurance to stabilize revenue. The board is part of the U.S. Department of Agriculture.

State Agriculture Commissioner Douglas P. Gillespie said the proposal calls for the federal government to pay 50 percent of the insurance premium, while Massachusetts and other Northeast states participating would pay an as yet undisclosed percentage, perhaps 25 percent. The dairy farmer would pay the balance.

The idea is a collaborative effort by the New England states, plus New York and Pennsylvania. The Northeast states would be part of the pilot program, according to the commissioner Mr. Gillespie said the proposal could “start to stabilize farmer’s income streams.” He said the market-based idea “makes more sense as a long-term solution” when times are bad, as opposed to direct cash payments to farmers advocated by some legislators.

Based on today’s actuarial tables, the commissioner estimates it would cost a dairy farmer taking in revenues of $500,000 annually about $10,000 to purchase the price support insurance each year.

Illustrating how the program would work, Mr. Gillespie said that if the federal government paid half the cost of the premium, and the state underwrote another quarter, an individual farmer’s purchase price for the insurance would be $2,500.


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