Ontario dairy farmers opt for quota exchange
Thursday, February 14, 2013
by SUSAN MANN
About half of the 20 Eastern Ontario dairy farmers holding Quebec quota have exchanged it for Ontario quota as part of a voluntary transfer program, say Dairy Farmers of Ontario spokesmen.
By Feb. 1 nine of the farmers exchanged their Quebec quota for Ontario quota, says Graham Lloyd, communications director and general counsel. The 20 farmers held a total of 917 kilograms of Quebec quota valued at $22.9 million.
Lloyd says he doesn’t have the amount of quota the nine producers hold that has been transferred to Ontario. No Quebec farmers have Ontario quota.
Before the milk marketing boards were established in the mid 1960s, these farmers had an arrangement to ship their milk into the Quebec/Montreal market. “They were permitted to continue that arrangement,” after marketing boards were established in the two provinces, Lloyd says.
George MacNaughton, operations division director, says a Quebec transporter picks up the milk, but due to the milk movement obligations of the Eastern Canadian milk-pooling agreement between Ontario, Quebec, Prince Edward Island, Nova Scotia, and New Brunswick, the milk is delivered to Ontario processors.
Lloyd says the farmers were offered the quota exchange so all Ontario producers could be treated under the same quality and quota policies. Even though the farmers are Ontario-based Quebec shippers and they fall under Quebec’s quota policies, Ontario is responsible for their milk quality and farm inspections. The five Eastern Canadian provinces in the milk pooling agreement have been harmonizing policies but some quota regulations are different from province to province, he says.
“It was decided it would be better for us and them to come into one jurisdiction, if they wanted to, rather than be under two,” Lloyd says.
The farmers and DFO don’t have to pay any money to the Quebec board, called Federation des producteurs de lait du Quebec, for the quota transfer, he says. In addition, the farmers don’t lose money or quota because of the transfer. Ontario doesn’t have to give anything to Quebec for the quota that’s being transferred.
MacNaughton says a key principle in the arrangement is to maintain the farmers’ ability to produce milk and generate income. Lloyd says the farmers’ production rights haven’t changed because of the transfer.
Lloyd notes that for Ontario the transfer increases the province’s total quota share within both the Eastern Canadian milk pool and the national arrangement.
MacNaughton says the farmers weren’t given a deadline to transfer their quota. Farmers attending a meeting early last fall were asked to consider doing it by sometime this year, such as Aug. 1. “There’s nothing in it, at this point in time, that’s mandatory.”
Lloyd says one advantage to farmers shifting to Ontario quota is they gain more saleable quota. That’s because Quebec has a larger percentage of non-saleable quota than Ontario. For example, for 100 kilograms of quota in Quebec eight kilograms is non-saleable. In Ontario, only four per cent of a farmer’s quota holdings are non-saleable. “The difference they get when they come to Ontario becomes saleable so they gain that asset,” he says. BF