By Josh Chetwynd
In a move that will assist New York dairy farmers and their insurance agents, the U.S. Department of Agriculture is shifting its payment requirements under its Margin Protection Program to make it easier for farmers to cover premium costs.
The Margin Protection Program serves as a safety net for catastrophic conditions or for periods of extended low margins. Under the old plan, farmers using the program were required to pay 25% of their yearly premium in February and the rest in June. Under the amended rules, premium costs can be spread out through deductions in payments received for selling milk. This new plan goes into effect for 2016.
“The decision by the USDA is great news for New York dairy farmers who are struggling with volatile milk prices and could use these flexible and spread-out insurance payments to preserve more cash on hand,” said U.S. Sen. Charles Schumer last week. “Now, we have made it easier for our cash-strapped dairy farmers across upstate during hard times.”
While agriculture insurance tends to be a market only a handful of independent brokers work in, the move was seen as a positive step by the Independent Insurance Agents & Brokers of New York (IIABNY).
“To the extent that it makes it easier for the farmers, it makes it easier for the insurance brokers who are in this business,” Tim Dodge, IIABNY’s assistant vice president of research Tim Dodge said. “If the farmers can spread the payment out and can budget for it, it makes it easier for them and what’s easier for the client is easier for the agent.”
