Two eastern Ontario dairy farmers have launched an appeal of some Dairy Farmers of Ontario quota policies saying the marketing board lacks the jurisdiction to enact those rules because they conflict with federal laws.
Brothers-in-law and long time business partners, Andy Senn and Franz Suter, who farm in St-Bernardin, are challenging Dairy Farmers’ rules limiting a farmer’s ability to share facilities with another farmer to only times of exceptional circumstances and only for up to a year. They are also challenging a rule prohibiting farmers from relocating quota bought as part of purchasing an ongoing farm operation for five years.
The hearing before the Ontario Agriculture, Food and Rural Affairs Appeal Tribunal is scheduled for Oct. 27 to 31 in Ottawa. Senn and Suter are appealing a Dairy Farmers’ 2013 decision denying them permission to relocate the 186 kilograms of quota they bought in October 2012 though the purchase of a St-Bernardin-area farm and to continue the shared facilities permission they obtained after buying that farm. That permission enabled them to temporarily produce milk using the purchased 186 kilograms of quota and their own quota all at their home farm.
Andy Senn says they decided to appeal their matter to the tribunal because “Dairy Farmers basically didn’t leave us any other choice. It was the middle of December (2013) that we go the results from the reconsideration hearing and they gave us until the end of January (2014) to move the cows back (to the home farm) or sell the quota by the end of April or take a 20 per cent quota cut.”
Graham Lloyd, Dairy Farmers general counsel and communications director, says this is the first time Dairy Farmers of Ontario rules are being challenged using the argument they conflict with federal laws. It’s also the first time there is a constitutional challenge of Dairy Farmers’ authority to enact policies, he says.
Senn and Suter have filed a notice “of constitutional challenge” of Dairy Farmers of Ontario’s quota rules and the Ontario Milk Act, Lloyd says. The challenge questions Dairy Farmers and the Ontario Farm Products Marketing Commission’s rights “to make policies that interfere in the business or competition of carrying on milk production.” The provincial farm products marketing commission has regulatory authority over the dairy industry in Ontario.
Senn and Suter are represented by the Ottawa law firm Caza Saikaley LLP. One of their lawyers Alyssa Tomkins says the governing statute, the Milk Act, doesn’t expressly authorize the regulations dealing with shared facilities and quota relocation. The authorization Dairy Farmers has under the Milk Act is “very vague,” she adds. “It becomes a question of how do you interpret that provision. Does it authorize this policy?”
In their August 12 notice outlining the challenge that was sent to Dairy Farmers, the tribunal, and the attorneys general for Ontario and Canada, lawyers Anne Tardif and Tomkins say sections of Dairy Farmers’ quota policies “constitute an arrangement between competitors that contravenes” a subsection of the Competition Act.
Tomkins says for a provincial law like the Milk Act, “you can’t imply that it takes precedence over the (federal) Competition Act. That can only happen if it was done expressly.” The Milk Act is very broad and gives Dairy Farmers powers to enact regulations “over a lot of things,” she says. “We are alleging that discretion is limited by any applicable federal legislation.”
Lloyd says Dairy Farmers strongly “disputes any suggestion that its powers are unconstitutional or somehow conflict with any federal laws. We view this as a challenge of our fundamental authority and jurisdiction to properly manage the dairy system.”
The situation arose after Senn and Suter bought the 186 kilograms of quota through the purchase of an ongoing farm near St-Bernardin in October 2012, called the Gauthier farm. They bought the farm for their sons, Lucas Senn and David Suter, who are both finishing post secondary agriculture degrees but plan to continue their families’ tradition of dairy farming.
The purchased Gauthier farm needed renovations. Senn and Suter applied for and received a shared facility permission to temporarily produce milk to fill the 186 kilograms of quota and their own quota both at the home farm.
In September 2013, Senn and Suter put in a request to Dairy Farmers’ quota committee asking:
· To transfer the quota from the Gauthier farm to their sons and to treat the transfer as if Lucas and David initially bought the farm and its milk producing license.
· To get an exemption from the requirement prohibiting transferring quota bought through an ongoing farm purchase for five years so they could transfer milk production to a property better suited to their situation that was to be bought near the Gauthier farm.
· To get an extension of the shared facility permission to allow modern facilities to be built on the newly acquired property.
In October 2013, Dairy Farmers told Senn and Suter in a letter their first request was granted and the quota bought with the Gauthier farm purchase was deemed to have been transferred to Lucas and David in October 2012. But Dairy Farmers denied the request to relocate the quota and it said the shared facility permission would only be extended to Jan. 31, 2014.
Dairy Farmers told Senn and Suter if milk wasn’t shipped from the Gauthier farm by Feb. 1, 2014 the quota held under that license would be ordered to be sold this spring and a 20 per cent reduction of the saleable quota would be applied before the quota was put on the exchange. Furthermore, if the quota wasn’t sold before the April quota exchange, Dairy Farmers would cancel it.
After a reconsideration hearing in November 2013, Dairy Farmers upheld its original decision, saying in a Dec. 3, 2013 letter to Senn and Suter the board was denying the requests because they weren’t allowed under current Dairy Farmers’ quota policies and Senn and Suter’s situation wasn’t considered to need an exemption.
Tomkins says there’s a stay of proceedings against Senn and Suter while the appeal is ongoing and that means the farmers haven’t yet had to sell the quota or produce milk from the Gauthier property.
Senn and Suter’s lawyers say in their Aug. 12 notice that Dairy Farmers wasn’t entitled to rely on sections of the quota policies to deny the requests because it lacked “jurisdiction to enact them.” The sections in question, B-4, which deals with the shared facilities rules, and C-5, which prevents farmers from relocating quota obtained by purchasing an ongoing farm for five years, “constitute a limitation on the appellant’s (Senn and Suter) right to engage in a lawful business and to engage in competition,” the notice says.
There is nothing in the Ministry of Agriculture, Food and Rural Affairs Act or the Milk Act that enables the farm products marketing commission or Dairy Farmers to create policies “that have the effect of law,” the notice says. In addition, those two sections of the quota policies (B-4 and C-5) are not authorized by statute or regulation and exceed the “delegated authority of the DFO,” the notice says. BF
Comments
Most industries and most businesses concentrate on meeting the needs of the customer - the dairy industry has obviously long-since forgotten about its customers and is, instead, concentrating on the meeting the needs of the legal profession to provide full-employment for itself.
In addition, one has to have considerable doubts about the basic adequacy of the post-secondary education being received by the prospective junior partners of the applicants. Why, for example, would any well-educated person aspire to a career in the increasingly-litigious quagmire calling itself the Canadian dairy industry, let alone aspire to assume even a small part of the cost of acquiring this much quota which serves no purpose except to fleece consumers, bully other farmers, and which could become worthless overnight?
Stephen Thompson, Clinton ON
I THOUGHT I WAS GOING TO BE THE ONLY BLACK SHEEP IN COW'S CLOTHING TO TAKE ON THIS GOVERNMENT AGENCY ! I AM PROUD TO SEE THESE TWO GIVE IT A WHIRL ,I HOPE YOU WANT TO BURN UP 100,000.00 OF DOLLARS LIKE WE DID ,ONLY TO FIND OUT THAT THE COURTS WILL PROTECT THEM NO MATTER RATHER IT IS WITHIN THE LAW OR NOT ! ONE LITTLE BIT OF ADVICE BE PREPARED TO LEAVE THE DAIRY INDUSTRY BECAUSE IF YOU DO NOT THEY WILL TRY TO BANKRUPT YOU INSTEAD ! THEY PLAY VERY MEAN AND HARD ,AFTER ALL IT IS NOT THEIR MONEY THEY ARE SPENDING ! AS FAR AS THE TRIBUNAL IT IS THERE ALSO TO PROTECT IT'S GOVERNMENT AGENCY SO BE PREPARED TO TAKE IT ALL THE WAY TO THE SUPREM COURT OF CANADA AND THEN BE REFUSED TO BE HEARD BECAUSE THEY KNOW BASED ON THE LAW YOU WOULD WIN ! JUST LETTING YOU KNOW ALL THIS ,IN CASE YOU FORGOT OR DID NOT KNOW , I TOOK THEM 7 TIMES ,ONE AFTER ONE TO THE TRIBUNAL FIRST ,THEN WHAT I THOUGHT WAS A FAIR SHOOT AT A WIN BASED ON THE LAW AND CAME OUT WITH A MERE VICTORY ON SOME AND A HUGH WIN ON OTHER ONES ! IF YOU ASKED ME TO DAY WOULD I DO IT AGAIN THE ANSWER WOULD BE YES !! GOOD LUCK BILL DENBY ,TREASURE ISLAND RV CENTRE
They must of known the farm they were buying needed renovations,why the year wait ?
There's not a dairy farmer out there that does not know the rules concerning buying and selling of milk quota,especially the 5 year requirement prohibiting transferring of quota.Either they could not come up with another big loan for renovations or they never intended to in the first place.
I was a dairy farmer for over 35 years and we all should know the rules,don't have much use for the people that choose to try and circumvent them.
I WOULD LIKE TO ASK YOU AND WHERE DO YOU LIVE OR CAME FROM ? THAT IS THE PROBLEM TO DAY ,JUST BECAUSE SOME GOVERNMENT EMPLOYEE DECIDES HE OR SHE DOES NOT LIKE THE FACT THAT THE FARMER MIGHT HAVE SOME CHOICE IN DECISION MAKING ,THEY STOP THEM ! THAT IS WHY THEY CAN DO ANYTHING THEY WANT TO FARMERS AT A MOMENT WARNING ! I KEEP ASKING MY SELF WHO AND THE HELL DO THEY THINK THEY ARE AND NO ONE ELSE EXCEPT THESE TWO GUYS SAID NO ! GOOD FOR THEM ,THESE PEOPLE MAKING THE RULES HAVE NEVER FARMED A DAY IN THERE LIFE ,BUT THEY KNOW EVERY THING JUST LIKE YOU ! WHAT GIVE YOU THE RIGHT TO SAY THEY SHOULD KNOW THE RULES ,THEY KNOW THE RULES OR THEY WOULD NOT BE PREPARED TO GO TO THE TRIBUNAL ! GOD SOME PEOPLE ARE STUPID !! BILL DENBY ,PS I TOOKTHESE SAME IDIOTS 7 TIMES IN A ROWAND ONE ALL BUT ONE AND LATER GOT A LARGE SETTLEMENT FROM THEM NOT TO GO ANY FURTHER IN COURT ! SO GIVE THEM HELL !!
Ah yes,
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It was simple.
THERE THEY GO AGAIN ,HOW DO YOU KNOW I AM NOT FARMING ,I BOUGHT A PROPERTY MONTHS AGO AND CASH CROP !YOU ARE QUITE A IDIOT !YOU SHOULD KNOW YOUR FACTS BEFORE YOU COMMENT ! WE ARE WAITING FOR A CUSTOMS RULING THEN WE WILL ALL SEE HOW HAPPY YOU ARE !! BILL DENBY ,STILL IMPORTS AND REEXPORTS DAIRY PRODUCTS !IT IS NOT HARD TO BREAK THOUGH THE PROTECTED WALL AND FLOAD THE ONTARIO MARKET !YOU DAIRY FARMERS ARE SO SELFISH AND GREEDY THAT YOU MAKE THE CONSUMER SICK .WHY DO YOU THINK SCMIDT IS STILL IN BUSINESS AND GROWING HIS SERVICES ! STUPID DAIRY FARMERS BUYING THAT QUOTA FOR THE RIGHT TO WORK FOR THE GOVERNMENT AGENCY ,THAT YOU DO NOT OWN ! BUT I HAVE TO THANK THEM ON THE PAY OUT !!
I don't doubt that they knew there were rules to be followed . When were these rules brought into being ? Could be that these rules are out dated , possibly only really work for the large or the extremely small producers .
Some times rules are need to be challenged to bring things up to date . There are many more partnerships in agriculture these days .
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