by SUSAN MANN
A St. Albert-area farmer who can no longer milk cows because of back problems won’t be seeing a reimbursement of the more than $300,000 he paid in quota transfer assessments to Dairy Farmers of Ontario.
That’s because the Agriculture, Food and Rural Affairs Appeal Tribunal ordered the appeal by Lucien Martel and his wife, Murielle, dismissed. The Martels were the sole shareholders of the farming corporation, Ferme Martel Inc.
In its March 2 written decision, the Tribunal says that “based on all the evidence we find that Ferme Martel Inc. has not satisfied us that there is anything sufficiently ‘special’ about Lucien Martel’s back condition to warrant an exemption from the policy.”
The Martels sold their entire quota (66.17 kilograms) on the April, 2008 exchange for $31,505 a kilogram. The transfer assessment on the transaction was $337,292.53.
In August, 2008 the Martels asked Dairy Farmers for an exemption from the transfer assessment policy because they had to sell their quota due to Lucien’s back problems. Dairy Farmers denied the request in October 2008. The organization also denied the Martels’ subsequent request to reconsider its decision.
At the hearing, Murielle told the Tribunal Lucien had occasional back problems before 2008 that he treated by visiting a chiropractor. But in January, 2008 he experienced serious back pains. Murielle tried to continue running the dairy operation with some hired help but in March, 2008 they decided to sell their quota and leave the industry.
The Tribunal was told Lucien was near being diagnosed with osteoporosis, a condition of brittle and fragile bones. In its written ruling the Tribunal says that two medical letters filed by the Martels didn’t provide any objective medical findings of Lucien’s inability to do his job as a dairy farmer.
In effect from November 2006 to July 2009, the transfer assessment imposed a minimum assessment of 15 per cent on all quota sold on the exchange. For farmers selling their entire quota, it exempted the last 10 kilograms. The controversial policy was introduced to ensure producers bid on the quota’s income stream and not its asset value. Opponents argued the policy was unfair to those planning to exit the industry.
In its 2009 annual report, Dairy Farmers says it collected a total of 2,164 kilograms of quota through the transfer assessment (from December, 2006 until the end of July, 2009). Of that, 1,581 kilograms was redistributed to existing farmers through provincial quota adjustments.
Bill Mitchell, assistant communications director, says when the transfer assessment policy was developed farmers asked that the accumulated quota be redistributed to all producers. The accumulated quota was used for adding to a province-wide quota increase and helped to offset a quota decrease.
At Dairy Farmers’ year end (Oct. 31, 2009), 583 kgs remained. It was used to offset the quota decrease implemented on Dec. 1, 2009. The decrease of 0.95 per cent would have been slightly higher if it wasn’t for the redistribution of the 583 kgs. BF
Comments
This lucky guy still got to stuff $1.75 million dollars in his pocket for something which probably cost him next to nothing to acquire because, at over $31,000 per kilo, he did a pretty-good job of topping the market.
If he sold now at $25,000 per kilo and got 100%, he'd be getting $1.65 million, or $100,000 less than what he actually got.
Pardon me for thinking he's more than just a tad greedy, and trying to have everything both ways - but then, isn't trying to have everything both ways, exactly what supply management is all about?
This whole quota system on all the commodities has evolved into a disgusting mess. It just makes me want to barf to witness it. I really feel sorry for all the farmers out there who want so badly to milk a few cows and raise some poultry in a free manner. It is shocking to see how a few special interest groups have been able to enlist the government's help to control the farming community at large.
LOL. What ?
It's hard to feel a whole lot of financial sympathy for someone who, at over $31,000 per kilo, sold his quota near the top of the market.
Furthermore, when not if TPP is signed by Canada, and quota starts to gradually become worthless, the decision by this farmer to have divested his quota when he did, for whatever reason, is going to be seen, in hindsight, as a particularly well-timed decision.
No matter how anyone looks at it, this farmer became quite-wealthy by selling a piece of paper at effectively the most-opportune time possible - I suspect the buyer of that piece of paper may not fare so well.
As always, caveat emptor!
Stephen Thompson, Clinton ON
No TPP is going to be signed Stephen quit dreaming
In last week's Ontario Farmer, Toronto trade lawyer, James, McIlroy, noted that the long-term strategy of spineless politicians of all parties has been to let supply management implode on its own by allowing in duty-free imports of MPIs with the result that - "the system is no longer viable".
Supply management has, indeed, imploded on its own, because dumping 800,000 litres of skim milk into lagoons was the inevitable outcome of a system which is "no longer viable" and is the sort of thing which makes politicians look stupid for continuing to support it and which makes dairy farmers look even stupider for being so devoted to defending quota values that they can't/won't do anything about it either.
Even worse for supply managed farmers is that non-supply managed farmers see this deliberate wasting of a product that would be completely marketable in the absence of supply management, as just another reason to get rid of supply management, and the rural aristocracy it supports, the sooner, the better.
The bottom line is that McIlroy notes that the "major industry stumble" of dumping skim milk into lagoons is going to be a significant factor that will give politicians justifiable momentum to deal with this before Labour Day.
It's like this - I can afford to be wrong, dairy and poultry farmers can't.
Stephen Thompson, Clinton ON
but to those who don't like milk , don't drink milk , or don't like/drink skim milk it won't cross their mind .
There is more food wasted in this world that there should not be a hungry person on the planet .
Might as well dump all the LGD beer down the drain also .
Whenever ethanol advocates and supply management supporters can't come up with any other reason to support either of their respective boon-doggles, and that's pretty-much all the time, they try to portray wasted food as the far-bigger enemy, as if that will be the "magic pill" that will make the deliberate waste of food by virtue of the legislation behind ethanol and supply management somehow acceptable - it won't.
It's like this - normal food wastage isn't legislatively-created waste, supply management and ethanol both are. Therefore, there is nothing good about legislation which, as in the case of both supply management and ethanol, results in the deliberate wasting of even more.
Stephen Thompson, Clinton ON
See: http://www.theglobeandmail.com/news/politics/chicken-industry-an-unfair-...
Let's not let some facts like New Zealand import blocks get in the way of your thesis.
In response to "New Zealand Blocks Chicken Imports" http://www.theglobeandmail.com/news/politics/chicken-industry-an-unfair-...
Many of the worst poultry diseases do not exist in New Zealand and Australia.
To open the door to a host of diseases that are endemic in chicken breeding stocks around the world (including Canada's flocks) would be insane.
To import potentially sick birds into New Zealand would be the same as proposing the importation of cows from England in 1987 at the height of their Mad Cow Disease epidemic there, when the rest of the world was free of Mad Cow.
Glenn Black
Small Flock Poultry Farmers of Canada
http://canadiansmallflockers.blogspot.ca
Disease or sanitary reasons, whether real or trivial, are effectively the same as 2000% tariffs.
I ve just read an article in the Tri-State Farm News on the huge surplus of milk in the USA this year. They are on track for a record year production wise, prices are down aa lot from last year, and,,they have had to dump skim milk in a couple of places as the plants can t handle the excess.
As well as being prohibited from exporting the recent skim milk surplus, DFO made no attempt to use the "price" component of the marketing mix to try to place this surplus skim milk into the marketing channel because supply management, with the exception of milk destined to become mozzarella cheese for frozen pizza makers, and to a lesser extent, fresh pizza makers, forbids the use of price to equate demand and supply - thereby maintaining the dictum - "the supply goes up, the supply goes down, but the price under supply management never, never, never wavers from the cost-of-production Holy Grail".
On the other hand, the US system allows for the use of exports as well as the use of price in the marketing mix and, therefore, price is used to clear surpluses, a practice, thanks to supply management, not allowed in Canada.
Therefore, instead of having anonymous supply management supporters try to be dismissive about the milk dumped by others, they should try to imagine how much more would be dumped in the US if they, too, had the same bizarre prohibitions against the use of price as a milk marketing tool as we do in Canada.
Stephen Thompson, Clinton ON
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