New Brunswick dairy producers agree to common quota policy

Friday, June 11, 2010

by SUSAN MANN

Eastern Canadian dairy farmer boards, including Ontario’s, have convinced another province to sign on to a common quota policy.

After talks in May with their counterparts in Ontario, Quebec and Nova Scotia, New Brunswick dairy producers have decided to adopt the common quota policy. The policy was implemented by the Ontario, Quebec and Nova Scotia boards in 2009.

Prince Edward Island producers, the fifth member of what the industry refers to as the P5 group that has been negotiating the common policies, has yet to join.

Peter Gould, general manager of Dairy Farmers of Ontario, says New Brunswick will introduce the common policies as soon as possible, possibly within the next month or two.

“They’re prepared to do it right away,” Gould says. But there will likely have to be a meeting of the quota committee for the provinces that have already harmonized their policies to work out the details.

Gould says the executive of his organization along with those of Quebec and Nova Scotia got together with the full boards of New Brunswick and Prince Edward Island in separate meetings in early May to talk about those provinces’ concerns with the common policies.

Gould says he’s confident P.E.I. will join quota harmonization eventually.

One of the P.E.I. board’s concerns is that it wants to keep quota leasing as a production management tool but it doesn’t want to take a 0.5 per cent reduction in its quota allocation as a penalty. Dairy Farmers of Prince Edward Island has proposed that quota leasing be made available to all farmers in the P5. Another of the province’s concerns is with milk movement obligations. 

Harold MacNevin, chairman of Dairy Farmers of Prince Edward Island, says having to take the quota reduction to keep its leasing program is a sore point with the Island’s farmers.

MacNevin says eight of Canada’s 10 provinces now have some method of selling production credits or leasing quota as part of their production and quota management options. It’s just Ontario and Quebec that don’t. “There are variations of it across Canada. They’re not all called quota leasing or quota credits.”

But Ontario has always been against quota leasing, which permits producers to temporarily transfer unused quota to another producer for a fee. Ontario’s long-standing view about quota is it is there to be used to produce milk, says Gould: “The quota itself should not be a means to generate income.”

Gould adds that before Ontario started negotiations with the other P5 provinces on the common quota policies it had a very dim view of any mechanism that allowed quota to be temporarily transferred between producers. Now that the provinces using the system explained it, Ontario understands why they’re doing it. But Ontario still doesn’t think it’s the right thing to do and won’t be introducing it into this province in the foreseeable future. “If you want to keep quota leasing there has to be some other consideration if you want to join P5 quota harmonization,” he says.

Both Nova Scotia and New Brunswick have opted to continue using quota leasing and have accepted the 0.5 per cent reduction in quota to participate in the harmonization process.

There are a total of 9,000 to 10,000 dairy farmers in the P5 provinces. Those provinces share revenue from industrial and fluid milk markets and work cooperatively on other matters of mutual interest. BF