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Bipartisan Budget Act goes sour for dairy

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Lindsey Knewstub

The recently passed Bipartisan Budget Act of 2018 includes significant changes to a major agricultural insurance program for dairy farmers. The bill generates new guidelines for the Margin Protection Program for Dairy Producers (MPP-Dairy) and, according to Cornell University agricultural economist Andrew Novakovic, highlights challenges for agriculture as Congress moves toward a new Farm Bill.

Andrew Novakovic

E. V. Baker Professor of Agricultural Economics Emeritus

Andrew Novakovic is a professor in Cornell University’s College of Agriculture and Life Science’s Dyson School of Applied Economics and Management, whose research focuses on the U.S. dairy industry and federal policy related to dairy, other agriculture and food.

Novakovic says:

“The Margin Protection Program for Dairy Producers was created to provide insurance against market and pricing volatility. While well intended, the program has not proven to be particularly helpful or effective, as dairy farmers have suffered below-average returns since 2015.

“Industry advocates and sympathetic legislators have subsequently sought ways to make the program more useful. Unfortunately, this has proven very difficult in the process of negotiating toward a new Farm Bill — simply because any changes that make the program more helpful necessarily make the program more expensive. Without specific approval to spend more money on MPP-Dairy, the agriculture committees had no room to improve the program.”

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