Senators seek federal funding for dairy farmers in 2017 budget & ask for a refund to
farmers for the $73 million they paid into the Dairy Margin Protection Program in
2015
USDA issues new disaster declaration, making RI farmers impacted by recent drought
eligible for emergency aid

WASHINGTON, DC – In an effort to help struggling dairy farmers in Rhode Island and
nationwide stay in business, U.S. Senators Jack Reed and Sheldon Whitehouse joined
16 of their senate colleagues urging Congress to provide funding for dairy farmers
across the nation in the fiscal year 2017 budget. Specifically, the senators asked
the Senate Appropriations Committee to authorize the Secretary of Agriculture to
refund farmers the $73 million that they paid into the Dairy Margin Protection
Program (DMPP) in 2015. They also announced that after months of dry weather that
negatively impacted farmers across the state, additional federal help is now
available following a new natural disaster designation by the U.S. Department of
Agriculture (USDA). Today, USDA designated Kent, Newport, Providence and Washington
counties in Rhode Island as primary natural disaster areas due to damages and losses
caused by the combined effects of unseasonably warm temperatures and freeze that
occurred from Feb. 14, 2016, through April 28, 2016, as well as a drought that
occurred from Aug. 2, 2016, and continues. Farmers and ranchers in Bristol County
also qualify for natural disaster assistance because the county is contiguous.

In their letter to Appropriations Committee leadership, the senators wrote: “As you
know, dairy farmers across the country are struggling to stay in business. This
year alone, dairy farms in a number of states have been forced to close at
alarmingly high levels. The Dairy Margin Protection Program has not provided the
safety net for farmers that was anticipated when the program was created. We believe
that there are key measures that can be taken that will provide critical near-term
support to cash-strapped dairy farmers and pave the way for longer-term
sustainability in the industry.”

“Rhode Island’s hardworking dairy farmers have been impacted by drought and economic
factors beyond their control. We must work on a bipartisan basis to ensure they can
remain in business,” said Senator Reed, who toured several Rhode Island farms
earlier this month with USDA officials. “I am pleased the Obama administration
recognizes the recent drought-related hardships our farmers face and is taking steps
to offer much needed financial assistance.”

“With milk prices at a historic low, dairy farmers in Rhode Island and across the
country are struggling to make ends meet,” said Senator Whitehouse. “The federal
government needs to give dairy farmers immediate relief and take steps to set this
important American industry on a more stable path.”

In addition to Reed and Whitehouse, the bipartisan letter was signed by U.S.
Senators Charles E. Schumer (D-NY), Kirsten Gillibrand (D-NY), Susan Collins (R-ME),
Bernard Sanders (I-VT), Angus King Jr. (I-ME), Barbara Boxer (D-CA), Al Franken
(D-MN), Elizabeth Warren (D-MA), Ron Wyden (D-OR), Jeanne Shaheen (D- NH), Patrick
J. Leahy (D-VT), Chris S. Murphy (D-CT), Richard Blumenthal (D-CT), Kelly Ayotte
(R-NH), Robert P. Casey Jr. (D-PA), and Edward J. Markey (D-MA).

In July, Reed and Whitehouse joined colleagues in writing a letter to Secretary of
Agriculture Tom Vilsack encouraging the Department of Agriculture to use its
authority, granted under the Commodity Credit Corporation Charter Act, to protect
the nation’s dairy farmers from crisis by both aiding domestic markets and
encouraging domestic consumption of dairy products.

As a result of USDA’s primary natural disaster area designation, farmers in eligible
counties now have up to eight months to apply for loans to help cover part of their
actual losses. Farmers qualifying for emergency loans may borrow up to 100 percent
of their actual production loss, or the amount needed to restore their operation to
its pre-disaster condition, whichever is less. The new emergency loan and
outstanding principal balance of any existing emergency loan owed by the applicant
may not exceed $500,000. The Farm Service Agency (FSA) will consider each loan
application on its own merits, taking into account the extent of losses, security
available and repayment ability. FSA has a variety of programs, in addition to the
EM loan program, to help eligible farmers recover from adversity.

Rhode Island farmers may contact the Rhode Island Farm Service Agency County Office
at: 401-828-3120.

The full text of the bipartisan letter is included below:

October 20, 2016

The Honorable Thad Cochran The
Honorable Barbara Mikulski
Chairman
Vice Chairwoman
Senate Appropriations Committee Senate
Appropriations Committee
Washington, DC 20510
Washington, DC 20510

The Honorable Jerry Moran The
Honorable Jeff Merkley
Chairman
Ranking Member
Senate Appropriations Subcommittee Senate
Appropriations Subcommittee
on Agriculture, Rural Development, on
Agriculture, Rural Development,
Food and Drug Administration and Food and Drug
Administration and
Related Agencies
Related Agencies
Washington, DC 20510
Washington, DC 20510

Dear Chairman Cochran, Vice Chairwoman Mikulski, Chairman Moran and Ranking Member
Merkley:

We write to urge you provide critical assistance for our nation’s dairy farmers in
appropriations legislation for Fiscal Year 2017.

As you know, dairy farmers across the country are struggling to stay in business.
This year alone, dairy farms in a number of states have been forced to close at
alarmingly high levels. Milk prices have dropped by more than 40 percent over the
past two years, and the U.S. Department of Agriculture (USDA) predicts low prices to
continue for the near future. Dairy production costs continue to rise, and severe
drought in some regions of the country has driven these costs up further.

To make matters worse, Congress has severely restricted the Secretary of
Agriculture’s ability to respond to this crisis. The Dairy Margin Protection
Program (DMPP) has not provided the safety net for farmers that was anticipated when
the program was created. There is widespread recognition that this program is not
working and must be reformed, but our dairy farmers cannot wait for several years
until a new Farm Bill is enacted. Many more will go out of business in the next
year if immediate support is not provided.

Despite current budgetary constraints and the need for future statutory changes, we
believe that there are key measures that can be taken in appropriations legislation
for FY17 that will provide critical near-term support to dairy farmers and pave the
way for longer-term sustainability in the industry.

Most importantly, we respectfully request that spending legislation for FY17 not
include any provision preventing the USDA from implementing clause 3 of Section 32
of the Agricultural Adjustment Act of 1935 or from engaging in surplus removal or
price support activities under section 5 of the Commodity Credit Corporation Charter
Act. Such provisions currently limit the Secretary of Agriculture’s ability to
provide emergency support to dairy farmers. Lifting this ban would allow the
Secretary more flexibility to respond to the current crisis.

We further request that $3 million within the budget of the National Agricultural
Statistics Service (NASS) be designated for a survey of average feed costs by state.
NASS estimates that such a survey will take 18-24 months, so it must begin this
work as soon as possible in order for its results to be ready when Congress
considers the next Farm Bill. Accurate information on regional variation in feed
costs is critical for designing a program that better supports small and family
farms in all regions of the country.

Additionally, we ask that the Committee consider authorizing the Secretary of
Agriculture to refund farmers for the $73 million that they paid into the DMPP in
2015. While we understand that the price tag on this request may make this move
difficult, we hope that the Committee can understand the frustration and
disillusionment of cash-strapped farmers who lost thousands of dollars expecting
financial support that was never provided.

Thank you for your consideration of these important requests. We stand ready to
work with you to help our nation’s dairy farmers during this crisis.

Sincerely,

###

Benjamin Bryant
Deputy Press Secretary
Office of U.S. Senator Jack Reed
728 Hart Senate Office Building
Washington, DC 20510