by SUSAN MANN
The Agriculture, Food and Rural Affairs Tribunal won’t review its decision earlier this year to deny a former dairy farmer an exemption from a Dairy Farmers of Ontario policy that reduced the amount he received from his the sale of his quota by thousands of dollars.
The Tribunal released the ruling Wednesday in the case involving Paul McDougall of Smithville.
His lawyer Don Good says he doesn’t anticipate McDougall will appeal the decision.
McDougall sold his quota and herd in the spring, 2008 to care for his wife and farming partner, Maryanne, who had cancer and has since died. As part of the transaction, Dairy Farmers retained 7.186 kilograms of quota valued at the time of the sale at $232,231.96.
Under the previous transfer assessment policy, in effect from November, 2006 until July, 2009, Dairy Farmers redistributed the retained quota from farmers selling it and exiting the industry to existing producers. The last 10 kilograms of the producer’s quota were exempt from the transfer assessment.
McDougall sought an exemption to the 15 per cent quota transfer assessment last spring. Dairy Farmers denied both his request for special consideration and for reconsideration.
He appealed to the Tribunal, which released its decision July 6 denying his request for an exemption to the policy. Last month, McDougall asked for a review of the Tribunal’s decision and that it be overturned.
Good says he’s disappointed in the decision. The facts in the McDougall case were almost identical to ones in another situation where the Tribunal agreed the farmer, Paul Haley, should get an exemption. “You can’t read Haleyview and you can’t read McDougall and come to any rational basis why one person got the money and the other person didn’t.”
In his decision to deny the request, however, John O’Kane, Tribunal vice-chair, noted that the Tribunal mentioned in several assessment cases that no set of established legal principles had emerged and each case “has turned on its own unique facts.” He agreed.
O’Kane also wasn’t convinced a fuller review was needed because of possible material errors of law.
Good had argued the Tribunal panel misapplied the law from previous assessment exemption cases. BF
Comments
A terminal illness is never an enjoyable time - yet this farmer would appear to have sold 47.906 units of quota for about $32,317 per unit of quota, almost at the top of the market.
Even with the 15% assessment, he still got to keep the proceeds from the sale of 40.72 units of quota, which at $32,317 per unit, would have netted him some $1,315,948.
If his wife was sick now, rather than in 2008, a sale of quota at $25,000 (or whatever it is) and assuming he got to keep 100% of the money, it would net him far over $118,000 less, in total, than what he received for his 85% share of the proceeds in 2008.
If I was to be on the Tribunal, I wouldn't hesitate to use the words "frivolous and vexatious" when describing this farmer's claim. And, really, there's no reason why the Tribunal shouldn't have used this type of expression in this case, if for no other reason than to deter others who waste Tribunal time and money by trying to have things both ways.
$232,000 may be frivolous to you, and the comment "he still got to keep the proceeds from the sale of 40.72 kilograms" is abhorrent! The man and his wife worked hard all their business life filling that quota, no doubt scrimping and saving so they could BUY it. This was never a gimme for him and he shouldn't be expected to subsidize the rest of the industry when he's already suffered such loss. I'll bet he would gladly give the money back and keep milking if he could just have his wife back. Shame on you and shame on the tribunal and shame on DFO.
I don't care how you look at it, this guy got to put $1.3 million dollars in his pocket that the rest of us can only dream about. Furthermore, I'll bet my own farm that he never spent a penny more than $300,000 to buy the 40 kg of quota that he got to keep the proceeds from, and that, therefore, $1 million of what he put in his pocket, was pure profit.
The truly abhorent fact of the matter is that this $1.3 muillion represented money which is coming, or is expected to come, directly from the consumer. The fact that dairy farmers are so completely cavalier, even in their grief, about the money they are unfairly extracting from the consumer, is more than enough reason to just simply abolish quota, and supply management, completely, and the soomer, the better.
Dollars aside - the poor guy lost his wife and his livehood, forced to sell a really good herd of cattle. Master breeder herd and a top notch manager....three generations deep.
If she hadnt been sick, their daughter was going to carry on the operation.
Regardless of $, a life change is not easy.
PS I am one who had to beat the country roads in the 1980's to buy cows and quota. The time was hell with shady deals all over the place, Not saying the current system is any better.
Divorce ended my farming days.
A good friend started dairy farming in 1980. Even with the high interest rates of the time, he claimed quota had a five-year payback. When he sold the cows, the quota, and the farm, in 2000, quota had a 20-year payback. The first reason he got out was with that type of price/earnings ratio, it made sound business sense to sell: the second reason he sold was that he figured that with this type of price/earnings multiple, it was only going to be a matter of time before consumers figured out that supply management was an obscenity they were paying for, and he didn't want to own quota when that happened.
Furthermore, now that you brought up the subject, divorce is just as valid a reason to have to sell quota, as death - especially if the sale of the quota is ordered by a judge. And even though I'm opposed to any sort, type, or kind, of this type of after-the-fact award, I'm surprised no farmer who had to sell his quota because of divorce has appealed to this Tribunal.
While you express great concern about this farmer subdidizing the rest of the industry, you seem to show no concern whatsoever about the only subsidy that matters, and that is the subsidy dairy farmers receive from consumers because of 200% tariff barriers on dairy products.
The subsidy argument is a door that swings both ways, yet farmers have great difficulty understanding that concept.
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