DFO program prioritizes organic milk producers

Wednesday, June 10, 2015

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