Sec. 1415. Supplemental production margin protection
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/bill/113/hr/2642/eas/section-1415A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A participating dairy operation may annually purchase supplemental production margin protection to protect, during the calendar year for which purchased, a higher level of the income of a participating dairy operation than the income level guaranteed by basic production margin protection under section 1414. A participating dairy operation purchasing supplemental production 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 production margin protection specified in section 1414(a), but not to exceed $8.00.
A participating dairy operation purchasing supplemental production 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 participating dairy operation. A participating dairy operation that purchases supplemental production margin protection shall pay an annual premium equal to the product obtained by multiplying— the coverage percentage elected by the participating dairy operation under subsection (c); the annual production history of the participating dairy operation; 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 operation, 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 $0.02 $5.50 $0.035 $6.00 $0.045 $6.50 $0.09 $7.00 $0.40 $7.50 $0.60 $8.00 $0.95. For milk marketings in excess of 4,000,000 pounds included in the annual production history of a participating dairy operation, the premium per hundredweight corresponding to each coverage level is as follows: Coverage Level Premium per Cwt. $4.50 $0.02 $5.00 $0.04 $5.50 $0.10 $6.00 $0.15 $6.50 $0.29 $7.00 $0.62 $7.50 $0.83 $8.00 $1.06. In promulgating the rules to initiate the production margin protection program, the Secretary shall provide more than 1 method by which a participating dairy operation that purchases supplemental production margin protection for a calendar year may pay the premium under this subsection for that year in any manner that maximizes participating dairy operation payment flexibility and program integrity. A participating dairy operation described in section 1412(c)(2) that purchases supplemental production 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 participating dairy operation purchases the coverage. A participating dairy operation that purchases supplemental production margin protection for a calendar year shall be legally obligated to pay the applicable premium for that calendar year, except that the Secretary may waive that obligation, under terms and conditions determined by the Secretary, for 1 or more producers in any participating dairy operation in the case of death, retirement, permanent dissolution of a participating dairy operation, or other circumstances as the Secretary considers appropriate to ensure the integrity of the program. A participating dairy operation with supplemental production margin protection shall receive a supplemental production margin protection payment whenever the average actual dairy production margin for a consecutive 2-month period is less than the coverage level threshold selected by the participating dairy operation under subsection (b). The supplemental production margin protection payment for a participating dairy operation is in addition to the basic production margin protection payment. The supplemental production margin protection payment for the participating dairy operation shall be determined as follows: The Secretary shall calculate the difference between the coverage level threshold selected by the participating dairy operation under subsection
(b)and the greater of— the average actual dairy production margin for the consecutive 2-month period; or $4.00. The amount determined under subparagraph
(A)shall be multiplied by the percentage selected by the participating dairy operation under subsection
(c)and by the lesser of the following: The annual production history of the participating dairy operation, divided by 6. The actual amount of milk marketed by the participating dairy operation during the consecutive 2-month period.