(a) For purposes of receiving MPP-Dairy coverage, a participating dairy operation may annually elect during an annual election period the following for the succeeding calendar year:
(1) A coverage level threshold for margins that, per cwt, is equal to one of the following: $4, $4.50, $5, $5.50, $6, $6.50, $7, $7.50, or $8; and
(2) A percentage of coverage for the production history from 25 percent to 90 percent, in 5-percent increments.
(b) In the absence of any such election, the applicable coverage level provided, with no premium due, is catastrophic level coverage.
(c) A participating dairy operation that elects margin protection coverage above $4 is required to pay an annual premium based on coverage level and covered production history in addition to the administrative fee. Tier 1 applies to covered production history up to and including 4 million pounds; Tier 2 applies to covered production history above 4 million pounds.
(d) The premium per cwt of milk, based on the elected percentage of coverage of production history is specified in the following tables.
Table 1 to Sec. 1430.107(d)------------------------------------------------------------------------
Tier 1 Premium
per cwt in 2014 Tier 2 Premium
and 2015 (for per cwt, all
the covered \1\ years (for the
Coverage level (margin) production part of covered
history that is 4 \1\ production
million pounds or history over 4
less) \2\ million pounds)------------------------------------------------------------------------$4.00............................. None None$4.50............................. $0.008 $0.020$5.00............................. 0.019 0.040$5.50............................. 0.030 0.100$6.00............................. 0.041 0.155$6.50............................. 0.068 0.290$7.00............................. 0.163 0.830$7.50............................. 0.225 1.060$8.00............................. 0.475 1.360------------------------------------------------------------------------\1\ The catastrophic coverage level provided at the $4 margin is 90
percent.
Table 2 to Sec. 1430.107(d)------------------------------------------------------------------------
Tier 1 Premium
per cwt after Tier 2 Premium
2015 (for the per cwt, all
covered \1\ years (for the
Coverage level (margin) production part of covered
history that is 4 \1\ production
million pounds or history over 4
less) million pounds)------------------------------------------------------------------------$4.00............................. None None$4.50............................. $0.010 $0.020$5.00............................. 0.025 0.040$5.50............................. 0.040 0.100$6.00............................. 0.055 0.155$6.50............................. 0.090 0.290$7.00............................. 0.217 0.830$7.50............................. 0.300 1.060$8.00............................. 0.475 1.360------------------------------------------------------------------------\1\ The catastrophic coverage level provided at the $4 margin is 90
percent.
(e) The annual premium due for a participating dairy operation is calculated by multiplying:
(1) The covered production history; and
(2) The premium per cwt of milk specified in paragraph (d) of this section for the coverage level elected by the dairy operation.
(f) In the case of a new dairy operation that first registers to participate in MPP-Dairy for a calendar year after the start of the calendar year, the participating dairy operation is required to pay a pro-rated premium for that calendar year based on the portion of the calendar year for which the participating dairy operation is eligible, and for which it purchases the coverage.
(g) The total annual premium for a participating dairy operation calculated as provided in paragraphs (d) and (e) of this section for calendar year 2014, is due in full at the time the contract is submitted to FSA during the open election period applicable for calendar year 2014, as determined by the Deputy Administrator. For subsequent calendar years, a participating dairy operation is required to pay the annual premium calculated as specified in paragraphs (d) and (e) of this section for the applicable calendar year, unless otherwise determined by the Deputy Administrator, according to either of the following options:
(1) In total at time of submission of coverage election to FSA; or
(2) In installments, with a minimum of 50 percent at the time of submission of coverage election to FSA and the remaining balance due no later than June 1 of the applicable calendar year of coverage.
(h) If a minimum of 50 percent of the premium is not paid by the end of an open election period for an applicable calendar year of coverage, the participating dairy operation will only be covered at catastrophic level coverage, except that the participating dairy operation will have no coverage whatsoever if the administrative fee for the applicable calendar year of coverage has not been timely paid.
(i) Annual premium balances due to FSA from a participating dairy operation for a calendar year of coverage must be paid in full no later than June 1 of the applicable calendar year. Premium balances due, but not in arrears, prior to June 1 will be deducted from any MPP-Dairy payment(s) made to the participating dairy operation during the applicable calendar year of coverage.
(j) A participating dairy operation with an unpaid premium balance after June 1 for a calendar year of coverage will lose eligibility for coverage as provided in Sec. 1430.109.
(k) The Deputy Administrator may waive the obligation to pay the premium, or refund the premium paid, of a participating dairy operation for a calendar year, in cases that include, but are not limited to, as determined by the Deputy Administrator, death, retirement, permanent dissolution of a participating dairy operation, or other circumstances determined by the Deputy Administrator.
(l) MPP-Dairy administrative fees and premiums are required to be paid by a negotiable instrument satisfactory in form to the Deputy Administrator and made payable to FSA and either mailed to or provided in person to the administrative county office or other location designated by FSA.