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Dairy Product Donation Program Best Served by Vouchers, IDFA Says

Oct 29, 2014

The U.S. Department of Agriculture issued in August its final rule on implementation plans for the Margin Protection Program for Dairy and the Dairy Product Donation Program (DPDP), which were established by the 2014 Farm Bill. In comments submitted Tuesday, IDFA focused on the DPDP, stressing the importance of proper timing and product selection, and urging USDA to select a voucher system for distribution.

The DPDP is designed to increase demand for dairy products when dairy farm profitability, as measured by the calculated dairy margin, is catastrophically low. By providing funds to be used to increase sales of dairy products, the DPDP should lead to an increase in the farm milk price.

Timing

In its comment, IDFA said USDA must be able to start and stop the program quickly, as required by the statute, to avoid market distortions that could harm international competitiveness and increase costs for other government nutrition programs. This may be difficult to do given that federal and state milk marketing order systems have time lags between when farm milk is marketed, minimum prices are established and payment is made. 

Type of Products

IDFA also said the program should not support any single dairy product or small group of dairy products. Spreading donations across the full range of dairy products would minimize market disruptions.  Moreover, including products with higher minimum regulated prices, especially fluid milk, would have the greatest impact on farm milk prices.

Distribution

IDFA believes the only practical way to administer the DPDP is through a voucher program. The comments provided examples of current effective voucher programs, including the federal Supplemental Nutrition Assistance Program and the Great American Milk Drive, sponsored by the Milk Processor Education Program and Feeding America.

“Distribution methods that can accommodate a high volume of dairy products during short time intervals would provide the greatest and most immediate impact on farm milk price recovery – the principal goal of the program,” IDFA said.  

Read the full comments here.

The comment period has been extended to December 15, and IDFA encourages members to submit additional comments of their own. Members may contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at rsaunders@idfa.org for help with drafting the comments or for additional information.

 
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