DFO monitors Nova Scotia proposal to remove price cap on quota sales

Wednesday, July 10, 2013

by SUSAN MANN

It’s too early to tell what impact a Nova Scotia proposal to remove the price cap on quota sales in that province will have on Ontario farmers, says a spokesman for Dairy Farmers of Ontario.

Nova Scotia and Ontario along with New Brunswick, Quebec and Prince Edward Island are part of an Eastern Canadian milk pooling agreement where they share revenue from industrial and fluid milk markets and work cooperatively on other matters of mutual interest. The provinces have worked for years to harmonize their policies, including those involving quota “as they have always felt that harmonization was to the best advantage of all dairy farmers,” it says in a statement on Dairy Farmers of Ontario’s website. The quota price in all five eastern Canadian provinces is capped at $25,000 per kilogram.

Graham Lloyd, general counsel and communications director for Dairy Farmers of Ontario, says Ontario doesn’t have any plans to remove the price cap here. “We don’t believe it’s in the best interests of the producers as a whole.”

The process for Dairy Farmers of Nova Scotia to remove the price cap is just beginning and the organization must follow many steps and procedures, including producer and industry consultations plus regulatory approval from the province’s Natural Products Marketing Council, which is the equivalent of the Ontario Farm Products Marketing Commisison, Lloyd says.

Dairy Farmers of Nova Scotia passed a motion on June 27 to start the process of removing the quota price cap. “We understand that there have been pressures in that province by a certain small group,” Lloyd explains.

He says the representatives from the other P5 provinces are in the process of learning how long it will take Nova Scotia to ditch its price cap. The matter will be discussed at the July 15 P5 quota committee meeting.

Will the P5 try to stop Nova Scotia from dropping the price cap for quota sales in that province? Lloyd says they’re in the process of trying to review the procedures involved “and upon that understanding the P5 will make a decision on how it plans to proceed.”

In its website statement, DFO says Nova Scotia’s decision “could have an impact on all P5 provinces in terms of equity and fairness among all P5 producers.” One of the objectives of harmonizing policies was to create equity among farmers who supply the same market and share the same revenues “so that they all have the same benefits and obligations,” the statement says.

Dairy Farmers of Nova Scotia has about 250 members producing 165 million litres of milk annually mostly destined for the fluid market. The province’s six processors and two producer-processors also make yogurt, ice cream, cheese, butter and skim milk powder. BF