Farm Products backs dairy board decision to cash in quota

Friday, May 1, 2009

© AgMedia Inc.

by SUSAN MANN

Dairy Farmers of Ontario has sold quota from its quota bank on two separate occasions recently to raise the more than $900,000 in transfer assessment refunds it had to pay several former dairy farmers who won their cases at the Agriculture, Food and Rural Affairs Appeal Tribunal.

Former licensed dairy farmer Bill Denby, Sunderland, objects to the commodity organization raising the money this way. Denby is one of those who successfully appealed the DFO’s transfer assessment.

He says the quota in the quota bank belongs to all producers and it wasn’t DFO’s to sell. He wrote to Ontario Agriculture Minister Leona Dombrowsky requesting a public inquiry into both DFO and the Ontario Farm Products Marketing Commission. She referred the matter to the Commission.

The Commission told Denby in a letter signed by chair Geri Kamenz that it found “DFO has acted within its delegated marketing authorities under the Milk Act and that no further investigation into this matter is required.”

Kamenz says the Commission looked to ensure that what the organization did “was consistent with the regulations and the application of the regulations.”

George MacNaughton, director of production and regulatory compliance, says in both cases the farmers involved asked the Tribunal for relief from the organization’s November, 2006 transfer assessment policy.

That policy applies a 15 per cent transfer assessment on all production quota sold on the exchange as of Nov. 17, 2006. The last 10 kilograms of quota is exempt. DFO denied the farmers’ initial requests for relief.

In both cases, the tribunal ordered that the quota sales income lost from the transfer assessment policy be returned in dollars.

MacNaughton says the transfer assessment is collected in kilograms of butterfat. “The only means DFO has to raise the money is to take the kilograms associated with the transfer assessment to generate funds to make the payment.”

Bill Mitchell, the organization’s assistant communications director, says if DFO grants a request for relief from a quota policy, it would normally refund the quota. If the person no longer holds a license, it’s temporarily reactivated so the person can sell the quota.  “In two recent decisions about quota, the direction back from the Tribunal was for a dollar amount rather than quota.”

In a decision delivered in December, 2008, the tribunal ordered DFO to refund, without interest:

•    $153,180 to William and Betty Denby and the estate of John Denby;
•    $139,268 to Dale McFeeters of Woodville; and
•    $511,305.52 to Keith Jarvis and Ron Jarvis of Seagrave.

On March 31, in a different hearing, the Tribunal ordered DFO to refund John and Susanna Cayer of Chesterville $114,492.80 without interest.

The DFO’s board has agreed to pay the Cayers and won’t appeal or request a judicial review. But in the decision of Denby, McFeeters and Jarvis, it has applied for a judicial review. “You ask for a judicial review when you believe that there was an error in law made in a decision,” says Mitchell.

In the meantime, the Tribunal-ordered refund remains in a trust established by the farmers’ lawyers until the review is completed.

Denby says he’s asking the Ontario Ombudsman to investigate both DFO and the Commission. “The Commission is supposed to be the watchdog over the industry and it’s not doing its job.” BF