Dairy farmers may be able to spread out their insurance payments under a plan proposed to the federal agriculture agency.
Sen. Charles Schumer (D-NY) is backing the proposal to let dairy cooperatives front individual farmer’s payments and then allow farmers to slowly pay the co-ops back. Right now, farmers pay for a quarter of their U.S.D.A. insurance in February and the rest in June. The change would help farmers deal with dropping milk prices, Schumer says.
The Democrat says farmers would be given more financial stability. "The co-ops have more resources than the individual farmers, it spreads out the cost over the whole group, and it can grant the farmers flexibility to pay throughout the year," he said Wednesday.
Dairy cooperatives produce and sell dairy products on behalf of many dairy farmers and they're typically more financially stable than an individual farmer.
"And thus they can survive, the farmers can, when the prices are low. Co-ops would simply deduct a certain percentage from the money they owe individual farmers for selling their milk until the premiums are paid," Schumer said.
New York is the nation's third largest producer of milk products.
Dairy insurance protects farmers against falling prices of milk, which are historically volatile. Right now, the price per hundred pounds of milk is down nine dollars from a few months ago, mostly due to a dropping demand from European markets.
The Democrat says co-ops and farmers like the idea and the agriculture department seems open to it so far. It would not require any legislative action.
