FACT SHEET

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY

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February 2013

Dairy Indemnity Payment Program

Overview

The Dairy Indemnity Payment 

Program (DIPP) provides 

payments to dairy producers when a public regulatory 

agency directs them to remove their raw milk from the 

commercial market because 

it has been contaminated by 

pesticides, nuclear radiation 

or fallout, or toxic substances 

and chemical residues other 

than pesticides. DIPP also 

provides payments to manufacturers of dairy products 

only for products removed 

from the market because of 

pesticide contamination.

Statutory Authority

DIPP was originally authorized by Public Law 90-484, 

the Act of August 13, 1968 

(7 U.S.C. 4501), and has 

been extended several times 

through various acts, most recently the American Taxpayer 

Relief Act of 2012 (Pub. L. 

112-240) that authorizes DIPP 

through 2013.

Eligibility Requirements

To be eligible to receive DIPP 

payments, the producer must:

•	 Have produced whole 

milk that was removed 

from the commercial market pursuant to the direction of a public agency;

•	 Not have been responsible 

for the milk contamination;

•	 Not have been indemnified for the same loss from

another source;

•	 Certify compliance with 

Highly Erodible Land 

Conservation (HELC) 

and Wetland conservation 

(WC) provisions on form 

AD-1026;

•	 Submit a completed form 

FSA-373, Dairy Indemnity Payment Program 

(DIPP) Application, to the 

applicable county Farm 

Service Agency (FSA) 

office no later than Dec.

31 following the end of 

the fiscal year in which the

loss occurred.

Note: A producer may be 

eligible if the substance that 

caused the removal of the 

milk from the market was:

•	 Registered and approved 

for use by the federal government when it was used;

•	 Used according to prescribed directions on the 

label.

Determining Indemnity

The county committee determines the affected producer’s 

normal marketing, which is 

based on the average daily 

production during the base 

period.

The indemnity payment to 

manufacturers of dairy products is calculated by multiplying the fair market value of 

the product times the amount 

of product removed from the 

market minus any salvage 

value of the product.

The indemnity payment to 

dairy producers is calculated 

by multiplying the number 

of cows milked, times the 

number of days milk is off the 

market, times base production in terms of pounds per 

cow per day, times the farm 

price for milk less hauling and 

promotion fees received by 

the producer.

Base and Claim Periods

The base period used to establish base production is the 

calendar month immediately 

before the month the milk is 

removed from the commercial 

market.

The claim period is the 28-

to-32 day period in which 

the milk was removed from 
FACT SHEET

Dairy Indemnity Payment Program February 2013

the market. A claim period 

may cross over into the next 

month, depending on when 

the milk would have been 

marketed. Claim periods do 

not depend on when the milk 

would have been produced.

Application Deadline

Affected producers and 

manufacturers should apply 

for indemnity payments at a 

local USDA Service Center or 

FSA office. Applications must

be filed no later than Dec. 31

following the fiscal year (FY)

in which the loss occurred. 

Losses from more than one 

FY cannot be included on one

application form FSA-373, 

Application for Dairy Indemnity Payment.

Example of Final Filing 

Date

The following provides an example of the final filing date:

If the loss occurred on or after Oct. 1, 2012, but by Sept. 

30, 2013, the final filing date

to apply is Dec. 31, 2013.

No Double Payments

Producers who receive indemnity payments and then file a

successful claim for damages 

against the party responsible 

for the contamination must 

return to FSA within 14 days 

the lesser of the amount received in:

•	 An indemnity payment, or

•	 Claim against the party 

responsible for the contamination.

 

More Information

To find more information

about DIPP and other FSA 

programs, contact a local FSA 

office or USDA Service Center, or visit the FSA website at 

www.fsa.usda.gov.

The U.S. Department of Agriculture (USDA) 

prohibits discrimination in all of its programs 

and activities on the basis of race, color, 

national origin, age, disability, and where 

applicable, sex, marital status, familial status, 

parental status, religion, sexual orientation, 

political beliefs, genetic information, reprisal, 

or because all or part of an individual’s 

income is derived from any public assistance 

program. (Not all prohibited bases apply to 

all programs.) Persons with disabilities who 

require alternative means for communication of program information (Braille, large 

print, audiotape, etc.) should contact USDA’s 

TARGET Center at (202) 720-2600 (voice 

and TDD). 

To file a complaint of discrimination, write to

USDA, Assistant Secretary for Civil Rights, 

Office of the Assistant Secretary for Civil

Rights, 1400 Independence Avenue, S.W., 

Stop 9410, Washington, DC 20250-9410, or 

call toll-free at (866) 632-9992 (English) or 

(800) 877-8339 (TDD) or (866) 377-8642 

(English Federal-relay) or (800) 845-6136 

(Spanish Federal-relay). 

USDA is an equal opportunity provider and 

employer.

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