by SUSAN MANN
Dairy Farmers of Ontario is giving farmers capable of shipping organic milk priority in its New Entrant Quota Assistance program this year to shore up the province’s organic milk shortage.
Graham Lloyd, Dairy Farmers general counsel and communications director, says the organization normally uses a lottery that’s administered by a third party to chose successful applicants. Now, “if you’re organic and you qualify, you get priority access over regular producers.”
Dairy Farmers new entrant quota assistance program, in place since 2009, assists 10 new farmers a year to start dairy farming. The program provides successful applicants with 12 kilograms of loaned quota and the applicant also has to buy 12 kilograms of quota. At $25,000 per kilogram, the successful applicant’s cost for quota is $300,000.
From March 2009 to October 2014, 47 new producers began dairy farming through the program, it says in the Dairy Farmers 2014 annual report. Usually there are about 60 people who apply to the quota assistance program, Lloyd says.
If an organic applicant meets all the criteria for both the program and organic production, the administrator will pick that person ahead of a non-organic applicant. There is a special application period for this organic new entrant quota assistance program that started June 1 and runs until June 30. Farmers will be notified by the end of August if they’re successful. The first month they can buy quota on the exchange is September.
Theoretically, if there are 10 organic applicants that qualify for the program this year, all the 10 spots in the program could go to organic producers, Lloyd says.
The organic milk shortage in Ontario came to light earlier this year when the farmer-owned co-operative Organic Meadow told its customers it didn’t have enough milk to make all of its cultured products. The co-op and its two related companies have since applied to the courts for protection from creditors and are due to file a proposal June 16. The co-op has continued production since it filed for creditor protection in April.
Rob Wallbridge, Organic Meadow interim member relations manager, says the marketing board’s efforts to add new organic producers through the new entrant program could help increase the organic milk supply. “It’s an idea our members have discussed and have suggested to DFO for a while now. It came up at the (special organic) producer meetings last May.”
Wallbridge estimates only a “small number of farmers” will be able to take advantage of the new entrant program as the timelines and requirements are pretty tight.
The program has generated interest among potential applicants, he says, noting he got a call about it just after the announcement was posted on Dairy Farmers’ website June 1 from an interested farmer. Wallbridge says he knows of other farmers “in a position that they may be able to take advantage of it.”
George MacNaughton, Dairy Farmers director of production and regulatory compliance, says successful applicants have 90 days to start production once they buy quota. When they have their quota and start production, they have 16 months to begin shipping organic milk.
MacNaughton says discussions about this program have been ongoing since February and the farmers interested in the program “already have organic crops. They’re going to diversify their operations and have a dairy component.” BF
Comments
I may have been asleep for a day or so, but where, when and how, perchance, is an aspiring dairy farmer going to be able to buy 12 kilograms of quota, and all at once, especially if all ten new entrants want to buy, and are ready to buy a combined total of 120 kilograms of quota in September of 2015?
How many farmers, other than the completely-daft, will put up hay and straw in anticipation of winning a lottery at the end of August in anticipation that they can buy quota in September, cows goodness knows when, in order to start shipping milk by no later than late November?
Secondly, how much, if any, quota is actually going to be offered that month unless DFO offers to sell any quota it might own itself?
In addition, nothing has changed about the killer after-tax cash flow requirements dumped on successful applicants starting in the year they have to start buying quota to replace the loaned quota, assuming any quota is even available at that time at any price.
That, plus the fact that aspiring applicants will have to finance everything else (unless a parent who owns quota gives them the farm) in the first years of operation except the 12 kilograms of loaned quota, it makes for what one banker suggested to me (and I agree completely) that unless both spouses have off-farm jobs for the entire length of time they're tied to this program, they'd better be prepared to sell their own 12 kilograms of quota in year ten, assuming quota will even exist at that time, rather than try to buy more.
As for Mr. MacNaughton's suggestion that this program will appeal to organic crop farmers, it might appeal to those few who happen to own an unused dairy barn but it will, I suggest, be of no appeal to organic crop farmers who would face the daunting prospect of building a barn as well as buying cows and 12 kilograms of quota at the outset. I suggest an appropriate question for Mr. MacNaughton would be to ask him if his banker would let him do it if he was an organic crop farmer without an existing dairy barn - I think not.
Stephen Thompson, Clinton ON
How long does it take to turn an non organic cow into a certified organic cow
Likely depends how long it takes to get from one barn to another . Not sure there is any testing of the milk that happens . A good organic operator would have a time frame that would be followed .
What if any are the differences and protocols between the two ?
Milk is milk is milk !
I have 4 different people look at using my empty dairy barn with double 6 milking system and bulk tank still their. They all told that they could not cash flow even with a barn and equipment of $500.oo per month Stephen Webster blyth Ontario.
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