10.053 Dairy Indemnity Program

Direct Payments with Unrestricted Use

U.S. Territories and Possessions

Individual/Family

Specialized Group

A--Agriculture

A-Marketing

A-Stabilization and Conservation Service;

J--Environment

J-Pesticides

 

FEDERAL AGENCY: FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

AUTHORIZATION: Agricultural Act of 1970, Title II, Section 204, Public Law 90-484, as amended, 7 U.S.C. 450j; Public Law 91-524; Agriculture and Consumer Protection Act of 1973, as amended, Public Law 93-86; Food and Agriculture Act of 1977, as amended, Public Law 95-113; Food and Agriculture Act of 1981, Public Law 97-98; Food Security Act of 1985, as amended, Title I, Public Law 99-198; Public Laws 99-190 and 99- 349; Food, Agriculture, Conservation, and Trade Act of 1990, Public Law 101-624, as amended; Public Laws 104-37, 104-180, 105-86, 105-277, and 106-78.

OBJECTIVES: To protect dairy farmers and manufacturers of dairy products who through no fault of their own, are directed to remove their milk or dairy products from commercial markets because of contamination from pesticides which have been approved for use by the Federal government.  Dairy farmers can also be indemnified because of contamination with chemicals or toxic substances, nuclear radiation or fallout.

TYPES OF ASSISTANCE: Direct Payments with Unrestricted Use.

USES AND USE RESTRICTIONS: Fair market value for the milk is paid to the dairy farmer who is unable to market because of any of the violating substances, and the fair market value of the dairy product is paid to the manufacturer who is unable to market because of pesticide residue.  No payment may be made to any dairy farmer or any manufacturer whose milk or dairy product was removed from the market as a result of his negligence or his willful failure to follow procedures prescribed by the Federal government.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility: Dairy farmers whose milk has been removed from the market by a public agency because of residue of any violating substance in such milk.  Manufacturers of dairy products whose product has been removed from the market by a public agency because of pesticide residue in such product.  This program is also available in Puerto Rico.

Beneficiary Eligibility: Dairy farmers whose milk has been removed from the market by a public agency because of residue of any violating substance in such milk. Manufacturers of dairy products whose product has been removed from the market by a public agency because of pesticide residue in such product. This program is available in Puerto Rico.

Credentials/Documentation: In the case of a dairy farmer, the notice removing the milk from the market along with a record of past marketing records for milk to determine the quantity and value of the milk not marketed, the violating substance involved and the uses of such violating substances during the previous 24 months.  In the case of the manufacturer of dairy products, the notice removing the product from the market and sufficient data to determine the value of the product.  This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination: None.  This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.

Application Procedure: Producers must file an application for payment on Form FSA-373 with the local county FSA office. Manufacturers must file information on the cause and amount of their loss with the local county FSA office.  This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.

Award Procedure: Initial approval is made by the county FSA committee.  Final approval is made by the Price Support Division in Washington, DC.

Deadlines: Claims must be filed by December 31 following the fiscal year in which the loss is incurred.

Range of Approval/Disapproval Time: From 60 to 90 days.

Appeals: Applicants may appeal to the county Farm Service Agency Committee and to the FSA, U.S. Department of Agriculture, Advisory and Corporate Affairs Staff (ACOS), Appeals and Litigation Group, 1400 Independence Avenue, SW., Washington, DC 20250-0570.

Renewals: Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements: Not applicable.

Length and Time Phasing of Assistance: Payment is made by Commodity Credit Corporation (CCC) check after claim approval.

POST ASSISTANCE REQUIREMENTS:

Reports: None.

Audits: Recipients are subject to audit by Office of Inspector General, USDA.

Records: The dairy farmer and the manufacturer of dairy products must keep any records in applying for a payment for 3 years following the year in which an application for payment was filed.

FINANCIAL INFORMATION:

Account Identification: 12-3314-0-1-351.

Obligations: (Direct payments) FY 99 $126,353; FY 00 est $650,000; and FY 01 est $647,000.

Range and Average of Financial Assistance: $88 to $95,000; $40,000.

PROGRAM ACCOMPLISHMENTS: During fiscal year 1999, 30 dairy farmers in nine States filed and received payment for claims totaling $123,353 under the Dairy Indemnity Program. These farmers' claims resulted from losses incurred due mostly to aflatoxin contamination discovered in their cattle's milk.  In 2000, an estimated $650,000 will be paid to producers and manufacturers who file claims under the program.  It is also estimated that $647,000 in payments will be made to producers who will suffer losses due to various contaminants discovered in their cattle's milk during fiscal year 2001.

REGULATIONS, GUIDELINES, AND LITERATURE: Program regulations were published in the Federal Register, 7 CFR, 760, and announced through the news media, Handbook 3-LD, Circulars and regulations issued by FSA.

INFORMATION CONTACTS:

Regional or Local Office: Consult the local telephone directory for location of the county FSA office.  If no listing, contact the appropriate State FSA office listed under the Farm Service Agency section of Appendix IV of the Catalog.

Headquarters Office: Department of Agriculture, Farm Service Agency, 1400 Independence Avenue, SW., Washington, DC 20250-0512. Telephone: (202) 720-7641.

RELATED PROGRAMS: 10.500, Cooperative Extension Service.

EXAMPLES OF FUNDED PROJECTS: Not applicable.

CRITERIA FOR SELECTING PROPOSALS: Not applicable.