Milk Producer - March 2009 - (Page 24)

P5POOLUPDATE By Bill Dimmick Quota harmonization Five Eastern provinces appear on track to begin implementing new policies on Aug. 1 T he proposed harmonization of P5 quota policies appeared to be on track for approval last month after the boards of the five provincial milk marketing organizations met in Ottawa early February. Representing Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Ontario, the five boards supported a report submitted by the P5 quota committee. It comprises the chair and general manager from each of the five provinces. The boards did discuss several issues, including designation of overand under-production credit days, non-saleable quota and the quota price cap, says Peter Gould, Dairy Farmers of Ontario (DFO) general manager and P5 quota committee member. “All the comments were being considered,” he says. “However, there was no consensus to make any changes of note.” The five boards were to vote on accepting the report and going ahead with harmonization by the end of February, after this issue of The Milk Producer had gone to press. “There was widespread support for the report and for harmonization in general,” Gould says. Approval by the five boards would mean implementation would start Aug. 1. Most policies would take effect on that date. Some would be phased in, most notably the $25,000 per kilogram price cap on quota. As well, the change in credit days to 30 under and 10 over could be implemented later in the year, Gould notes. The P5 chose quota policy harmonization as the first step to overall harmonization. The longer term goal is more streamlined administration treating all producers in the pool equally, regardless of the province in which they farm, he says. Here’s a synopsis of the harmonization proposals as they stood in February: Quota exchange When bids to buy are greater than offers to sell, quota would be prorated. The method of pro-ration would be up to each province. There is no agreement to develop an interprovincial quota exchange. New entrant program The P5 would provide for 25 new entrants per year: 12 in Quebec, 10 in Ontario, and one each in N.S., N.B., and P.E.I. Each new entrant would have to buy 12 kg of quota and be entitled to borrow 12 kg. Price cap The $25,000 per kg cap would have to be in place by July 31, 2011. DFO has made no decision yet about timing or phasing in the cap. Shared facilities DFO would continue its existing policy permitting use of shared facilities during new construction or a major renovation. It would also allow expansion with quota pro-rated. Over-Under production credits Thirty days under, 10 days over. Producers above 10 days over would not be allowed to use any more credits. SNF:Butterfat ratio No change to current policy for now. A common P5 ratio could be used in future, and the ratio relaxed if skim solids are eventually priced competitively based on world prices. Over-quota production Over-quota charge would be reduced to zero. Non-saleable quota Effective Aug. 1, 2009, all quota increases would be non-saleable in all P5 provinces. Decision-making Unanimity would be required to harmonize policies. There would be seven votes on the P5 Quota Committee, two for Ontario, two for Quebec and one each for N.S., N.B. and P.E.I. A double majority would be needed to change harmonized policies—four out of seven votes and three out of five provinces. New policies would require unanimity. Quota transfers Provincial quota exchanges would continue to operate as they do now. Same-site transfers, donations to immediate family members and onetime donations to a previous business partner would be permitted. 24 | March 2009 | MilkPRODUCER

Table of Contents for the Digital Edition of Milk Producer - March 2009

Milk Producer - March 2009
Contents
Editor's Notes
DFO Chair's Message
Dairy Update
DFC Promotion
Farm Finance
P5Pool Update
Issues Update
Weathering the Storm
Research
Applied Science
Ruminations
Markets
New 'N' Noted
Back Forty

Milk Producer - March 2009