Sugar and Dairy Programs

Rounding out the Title 1 price supports are the sugar and dairy programs. Though the sugar program did not see any reforms with this bill, the dairy programs were changed significantly, specifically the creation of the Margin Protection Program-Dairy.

Sugar Program

Purpose: Requires the USDA to operate the sugar nonrecourse loan program at no net cost by avoiding loan forfeitures to the Commodity Credit Corporation. The USDA maintains market prices above loan rates by (1) limiting amount of sugar that processors of sugar beets and sugarcane sell to the U.S. market under marketing allotments, (2) restricting imports under a quota, and (3) operating the feedstock flexibility program for bioenergy producers (i.e., sugar-to- ethanol program) under specified conditions. The loan rates through the 2018 crop year are 18.75¢/lb. for raw cane sugar and 24.09¢/lb. for refined beet sugar.
By October 1 of each marketing year, the USDA is required to set the initial sugar import quota at 1.256 million short tons – the minimum spelled out in a U.S. multilateral trade commitment to other World Trade Organization member countries. This quota can only be raised before the midpoint of the year (April 1) in case of an emergency sugar shortage caused by a weather disaster, war, or a similar event determined by the Secretary. Should this occur, the USDA is granted discretionary authority to increase the sugar quota beginning on April 1, with specified steps.
Lastly, there is a limit to the amount of sugar for food that processors can sell each year. The USDA is required each year to set the “overall allotment quantity” (OAQ) at not less than 85% of estimated U.S. human consumption. 
Funding: Unlimited, as it should not cost the Federal government anything overall
History: The origin of the program can be traced to legislation in 1981 Farm Act, with the Feedstock Flexibility Program (FFP) aspect being added in the 2008 Farm Bill.
For More Information, Visit These Sites:
The USDA's Economic Research Service's site and the USDA's Foreign Agricultural Service's site
American Sugar Alliance
The Coalition for Sugar Reform
The Heritage Foundation

Dairy Forward Pricing Program

Purpose: Allows farmers to voluntarily enter into forward price contracts with handlers for pooled milk. The program allows regulated handlers to pay farmers in accordance with the terms of a forward contract instead of paying the minimum Federal order blend price for pooled milk. This applies only to milk purchased for manufactured products (Classes II, III, and IV), and excludes milk purchased for fluid consumption (Class I). The program is administered by the USDA's Agricultural Marketing Serivce.
Funding: N/A
History: This began as a pilot program in the 2000 Farm Bill, and then established in the 2008 Farm Bill.
For More Information, Visit These Sites:
The USDA's AMS site

Dairy Indemnity Program

Purpose: Authorizes payments to dairy farmers when a public regulatory agency directs removal of their raw milk from the market because of contamination by pesticides, nuclear radiation or fallout, or toxic substances and other chemical residues. This program is administered by the USDA's Farm Service Agency.
Funding: Based on the past decade, the program is usually funded at $100,000 annually, and outlays equal less than $200,000. (House Committee on Agriculture)
History: The program was originally authorized by Public Law 90-484, the Act of August 13, 1968 (7 U.S.C. 4501).
For More Information, Visit These Sites:
The USDA's FSA site

Dairy Promotion and Research Program

(aka Dairy Checkoff Program)

Purpose: Generic dairy product promotion, research, and nutrition education program funded by a 15 cents per hundred-weight assessment paid by U.S. dairy farmers on their milk and a 7.5 cents per hundred-weight paid by importers on dairy products imported into the U.S. The National Dairy Promotion and Research Board administers the program which funds such efforts as Fuel Up to Play 60, the National Dairy Council, and the U.S. Dairy Export Council.
History: The program was created in The Dairy Production Stabilization Act of 1983. Referendums for the program's continuation were held among dairy farmers in 1985 and 1993.
For More Information, Visit These Sites:
The USDA's Agricultural Marketing Service's site (Dairy Management, Inc)

Margin Protection Program - Dairy

Purpose: The program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin (the difference between the all-milk price and average feed costs) is less than $4.00 per hundredweight (cwt). Buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt. The program is administered by the USDA's Farm Service Agency.
History: Created in this bill to replace the Milk Income Loss Contract Program (MILC), a counter-cylical payment program.
For More Information, Visit These Sites:
The USDA'S FSA site
FarmDocDaily (run by the National Milk Producers Federation)
National Milk Producers Federation

Dairy Product Protection Program

Purpose: This program is triggered in times of low operating margins—actual dairy production margin is $4.00/cwt or less for each of the immediately preceding 2 months—for dairy producers, and requires USDA to purchase dairy products for donation to food banks and other feeding programs. This program would be administered by the USDA's Farm Service Agency and the Food and Nutrition Service.
Funding: N/A
History: This program was created along with the Margin Protection Program - Dairy in the 2014 Farm Bill.
For More Information, Visit These Sites:
The USDA's FSA fact sheet