Sec. 1415. Supplemental margin protection
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/bill/113/hr/1947/ih/section-1415·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Supplemental margin protection is available only on an annual basis. A participating dairy producer may annually purchase supplemental margin protection to protect, during the calendar year for which purchased, a higher level of the income of a participating dairy producer than the income level guaranteed by basic margin protection under section 1414. A participating dairy producer purchasing supplemental margin protection for a year shall elect a coverage level that is higher, in any increment of $0.50, than the payment threshold for basic margin protection specified in section 1414(b), but not to exceed $8.00.
A participating dairy producer purchasing supplemental margin protection for a year shall elect a percentage of coverage equal to not more than 90 percent, nor less than 25 percent, of the annual production history of the dairy operation of the participating dairy producer. A participating dairy producer that purchases supplemental margin protection shall pay an annual premium equal to the product obtained by multiplying— the percentage selected by the dairy producer under subsection (c); the annual production history of the dairy producer; and the premium per hundredweight of milk, as specified in the applicable table under paragraph
(2)or (3). For the first 4,000,000 pounds of milk marketings included in the annual production history of a participating dairy producer, the premium per hundredweight corresponding to each coverage level specified in the following table is as follows: Coverage Level Premium per Cwt. $4.50 $0.01 $5.00 $0.025 $5.50 $0.04 $6.00 $0.065 $6.50 $0.09 $7.00 $0.434 $7.50 $0.590 $8.00 $0.922 For milk marketings in excess of 4,000,000 pounds included in the annual production history of a participating dairy producer, the premium per hundredweight corresponding to each coverage level is as follows: Coverage Level Premium per Cwt. $4.50 $0.015 $5.00 $0.036 $5.50 $0.081 $6.00 $0.155 $6.50 $0.230 $7.00 $0.434 $7.50 $0.590 $8.00 $0.922 In promulgating the rules to initiate the margin protection program, the Secretary shall provide more than one method by which a participating dairy producer that purchases supplemental margin protection for a calendar year may pay the premium under this subsection for that year that maximizes producer payment flexibility and program integrity. A dairy producer described in section 1412(c)(2) that purchases supplemental margin protection for a calendar year after the start of the calendar year shall pay a pro-rated premium for that calendar year based on the portion of the calendar year for which the producer purchases the coverage. A participating dairy producer that purchases supplemental margin protection for a calendar year shall be legally obligated to pay the applicable premium for that calendar year, except that, if the dairy producer retires, the producer may request that Secretary cancel the supplemental margin protection if the producer has terminated the dairy operation entirely and certifies under oath that the producer will not be actively engaged in any dairy operation for at least the next seven years. A participating dairy producer with supplemental margin protection shall receive a supplemental margin protection payment whenever the average actual dairy producer margin for a consecutive two-month period is less than the coverage level threshold selected by the dairy producer under subsection (b). The supplemental margin protection payment for a participating dairy producer is in addition to the basic margin protection payment. The supplemental margin protection payment for the dairy operation of a participating dairy producer shall be determined as follows: The Secretary shall calculate the difference between the coverage level threshold selected by the dairy producer under subsection
(b)and the greater of— the average actual dairy producer margin for the consecutive two-month period; or $4.00. The amount determined under subparagraph
(A)shall be multiplied by the percentage selected by the participating dairy producer under subsection
(c)and by the lesser of the following: The annual production history of the dairy operation of the dairy producer, divided by six. The actual amount of milk marketed by the dairy operation of the dairy producer during the consecutive two-month period.