Lease was necessary, Tribunal rules

Monday, May 10, 2010

by BRIAN LOCKHART

A Smithville, Ontario turkey producer is going to have to shell out more than $13,000 for skipping some crucial paperwork.

An April 29 ruling from the Ontario Ministry of Agriculture, Food and Rural Affairs Appeal Tribunal, recently posted on the Tribunal’s website, upholds a Turkey Farmers of Ontario decision to penalize John Petropoulos for over marketing his quota by failing to secure the proper barn lease.

Trouble arose for Petropoulos after he transferred turkey production from one barn owned by an Ontario numbered company in which he has shares, to another owned by a different company, A & V Petropoulos, in which he also has ownership.

Even though both barns are part of the same farm operation, because a transfer of quota from one company to another took place, Turkey Board regulations requiring producers to obtain board permission and a premises lease were in effect.

“A quota is attached to a property,” explains Ingrid DeVisser, chair of the supply-managed board. “If you want to grow anywhere other than that property you have to lease with the other person.”

In Petropoulos' case, because there was no lease agreement, A & V Petropoulos, which received the added production, over produced under the terms of its existing quota, DeVisser says.

In 2009, the board levied a fine of 22 cents per kilogram for the over production and the total fine amounted to $13,174.85.

Petropoulos appealed the board’s decision to the Tribunal seeking to replace the fine with a late filing fee, which would have substantially reduced the financial penalty.

At the Tribunal hearing in March, Petropoulos testified he had “gradually taken over more of the administrative/management duties” of the turkey operation and the lease renewal was “missed in the transfer of duties.”

However, an investigation revealed Petropoulos neglected to have leases on file for the years 2005, 2006 and 2007, when production was also transferred.

In a final assessment the Tribunal concluded that Petropoulos was dealt with in a “fair and reasonable manner,” especially considering the absence of a lease in previous years.

It is the “producers responsibility to complete and submit the required lease application” prior to placing any birds on the premises, states the Tribunal’s written decision.

Petropoulos could not be reached for comment. BF