New dairy quota policy would lower prices, limit access

Tuesday, February 24, 2009

© AgMedia Inc.

by GEOFF DALE

WOODSTOCK – A discussion panel on P5 harmonization and changes in quota transfer policy at the annual Southwestern Ontario Dairy Symposium provoked some spirited debate but producers came away with a better understanding of the concept, says a symposium coordinator.

Jack Rodenburg says the biggest concern among producers he’s talked with is the availability of quota under the new system, particularly for those undertaking a major expansion of their operations and in need of buying a large amount over a short period of time.

“If the new system results in a lower price, then it will be advantageous to the buyer but it also limits access,” he says. “Because before it went to the highest bidder and now it will be divided among various other bidders.”

Ontario has been a part of the P5 – a forum of policy discussions – with Quebec, Nova Scotia, New Brunswick and Prince Edward Island for more than a decade, sharing markets and revenues.

The long-term goal is for P5 to become a governance board making policy and market decisions. Those decisions would be made under a double majority – a majority of provinces and provincial representatives. It would also permit streamlining of resources into a single body.

George MacNaughton, production division director with Dairy Farmers of Ontario, says the panel presented advantages and disadvantages so producers could do a “fair evaluation.”

“Overall the majority of producers seem to favour this (proposed) policy over the current one,” he says.

A second member of the three-person panel Chris Buchner, of Elmwood Farms and Progressive Dairy Producers, says there is more to the change than just harmonization.

“With the merging of boards across Canada there is probably a real opportunity to dialogue more with the industry, processors and other stakeholders to ensure we’re heading into a situation that will take us 15-20 years down the road, instead of changing the policy every three years.”

Despite concerns over quota availability, Rodenburg says the panel was useful in clarifying the impact of changes. “There are still big questions out there but at least now producers feel better equipped to deal with them.” BF