Tribunal dismisses dairy farmer's appeal

Monday, March 8, 2010

by SUSAN MANN

A St. Albert-area farmer who can no longer milk cows because of back problems won’t be seeing a reimbursement of the more than $300,000 he paid in quota transfer assessments to Dairy Farmers of Ontario.

That’s because the Agriculture, Food and Rural Affairs Appeal Tribunal ordered the appeal by Lucien Martel and his wife, Murielle, dismissed. The Martels were the sole shareholders of the farming corporation, Ferme Martel Inc.

In its March 2 written decision, the Tribunal says that “based on all the evidence we find that Ferme Martel Inc. has not satisfied us that there is anything sufficiently ‘special’ about Lucien Martel’s back condition to warrant an exemption from the policy.”

The Martels sold their entire quota (66.17 kilograms) on the April, 2008 exchange for $31,505 a kilogram. The transfer assessment on the transaction was $337,292.53.

In August, 2008 the Martels asked Dairy Farmers for an exemption from the transfer assessment policy because they had to sell their quota due to Lucien’s back problems. Dairy Farmers denied the request in October 2008. The organization also denied the Martels’ subsequent request to reconsider its decision.

At the hearing, Murielle told the Tribunal Lucien had occasional back problems before 2008 that he treated by visiting a chiropractor. But in January, 2008 he experienced serious back pains. Murielle tried to continue running the dairy operation with some hired help but in March, 2008 they decided to sell their quota and leave the industry.

The Tribunal was told Lucien was near being diagnosed with osteoporosis, a condition of brittle and fragile bones. In its written ruling the Tribunal says that two medical letters filed by the Martels didn’t provide any objective medical findings of Lucien’s inability to do his job as a dairy farmer.

In effect from November 2006 to July 2009, the transfer assessment imposed a minimum assessment of 15 per cent on all quota sold on the exchange. For farmers selling their entire quota, it exempted the last 10 kilograms. The controversial policy was introduced to ensure producers bid on the quota’s income stream and not its asset value. Opponents argued the policy was unfair to those planning to exit the industry.

In its 2009 annual report, Dairy Farmers says it collected a total of 2,164 kilograms of quota through the transfer assessment (from December, 2006 until the end of July, 2009). Of that, 1,581 kilograms was redistributed to existing farmers through provincial quota adjustments.

Bill Mitchell, assistant communications director, says when the transfer assessment policy was developed farmers asked that the accumulated quota be redistributed to all producers. The accumulated quota was used for adding to a province-wide quota increase and helped to offset a quota decrease.

At Dairy Farmers’ year end (Oct. 31, 2009), 583 kgs remained. It was used to offset the quota decrease implemented on Dec. 1, 2009.  The decrease of 0.95 per cent would have been slightly higher if it wasn’t for the redistribution of the 583 kgs. BF