USDA outlines plan to send dairy farmers payments

AP News
Posted: Dec 17, 2009 4:11 PM

Giving a boost to struggling dairy producers, the Agriculture Department said Thursday it plans to dole out one-time payments to farmers.

The USDA's announcement of the new Dairy Economic Loss Assistance Payment program comes after Congress earlier this year approved $350 million to help the struggling dairy industry, which has been mired in a lengthy downturn.

Agriculture Secretary Tom Vilsack said he'd heard hundreds of stories from struggling dairy farmers.

"Now, we'll be able to offer them help," he said.

When Congress approved the funding in October, $60 million was set aside to cover purchases of surplus cheese and other dairy products, but the USDA was given wide discretion with the remaining $290 million.

Under the plan, eligible dairy producers will receive a payment that is based on the amount of milk produced and commercially marketed by their operation between February and July 2009. Dairy producers who have already registered with the agency do not need to apply for the payments.

Producers who have not provided production data to USDA have 30 days _ until Jan. 19, 2010 _ to apply. USDA officials said producers who have an annual non-farm income of more than $500,000 between 2006 and 2008 will not be eligible for the program.

The plan, which USDA crafted in consultation with farmers from various dairy-producing states, was generally well received. It dispenses the money in a similar way as had been previously done under USDA's Milk Income Loss Contract program.

Kirsten Gillibrand, D-N.Y., and a member of the Senate Agriculture Committee, said she believed the plan would provide needed relief to dairy farmers but said it was only one step in the path to recovery.

"This is only a temporary solution to the fundamental problems with our dairy pricing system," she said.