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The Rural Voice, 1980-03, Page 21Over the farm gate Marketing boards for consumers too Dear Consumer, Much criticism has been levelled at farm marketing boards by editorial writers and by politicians, and, to a lesser degree, by consumer organizations. Because of this, many consumers have the impression that farm marketing boards are created by the government in order to rip the consumer off. People who should know better have left the idea with consumers that farm marketing boards deliberately restrict production in order to drive up prices and to give farmers an easy and rich life. Let us take a look at one of the most criticized boards, the Ontario Milk Marketing Board. In the sixties, dairy farmers lived in poverty, receiving about $3 to $4 for 100 litres of milk. The milk was carried in cans to the side of the road, where trucks from the dairies would pick it up. There could be pick up runs by three different dairies on the same road. Poverty was common among dairy farmers. And when it became unbearable, the farmer sold his cattle, to go into some other product. As a result, a shortage of milk came about, and the remaining farmers received more for their product, because dairies competed for it. This yo-yo price effect did farmers as consumers no good and was clearly unacceptable in a country with a growing prosperity, like Canada. So the farmers got together and said: "Let's form a joint selling organization. Then we can estimate what the amount of milk needed for the market will be, and we won't produc a more than is needed." This is, of course, the same business method that any manufacturing corpora- tion practices. No widget company will make more widgets than it can sell. The new organization was called the Ontario Milk Marketing Board (OMMB). Once it was determined how much milk was needed, the OMMB divided the share each farmer could produce among the farmers who had remained in business when the going got rough, on a percentage based on previous production. This share is called a "quota". Once it became clear that there was a profit in milk production (for the marketing board figured the cost of producing the milk in setting the sale price,) many farmers didn't mind the seven fourteen -hour days. They now wanted to get into dairy production, and offered quota - holding farmers money for that quota. That quota value has been a headache for the OMMB ever since, and it has tried different methods to keep that value at a minimum. The OMMB did more to improve the dairy industry. Slowly it worked to elimi- nate the practice of shipping milk in cans, with its potential for contamination. The bulk cooter is now a compulsory feature in the milk house, and the consumer is assured a clean, healthy product. The added cost of production has been passed on to the consumer and been accepted as reasonable. The inefficient pick-up service by the various dairies has also been eliminated, and one bulk tank truck pumps all the milk on a certain route, and takes it to a dairy designated by the milk board, decreasing the cost, and that decrease is also passed on to consumers. The planned production necessitated a share system for dairies as well, and soon there was a quota value developed too. The result was that many small cheese factories sold their quota to larger dairies, a move bemoaned by many as a bad result of OMMB policies. The sometimes levelled accusation against the OMMB, that these cheese factories went out of production because they couldn't get enough milk, doesn't bear out. Lately, there has been a demand from processors in Ontario for more milk, because of markets for more cheddar cheese. The fact that more milk was not available wasn't so much because the OMMB restricted milk production, but because dairy farmers produced five per cent less milk than they had quota for. The OMMB wants farmers to produce their full quota, for then Ontario can get more of the market share in Canada as a whole. The milk producer is a bit leery though, for it is not so long ago that he produced more than the market could bear. The resulting mountain of milk powder had to be stored at the farmer's expense, and sold on the world market at a loss, also at the farmer's expense. As you have seen farmers wanted to regulate production to fit the market, and not the government, as is so often assumed. It is the farmers, through their board, who calculate prices, and it is the government who watches this, so you won't be ripped off. The marketing board insures clean, uncontaminated milk at a steady price that must be justified before the government allows any price increase. If a farmer produces more than his share of milk, he not only won't get paid for it, but he may have to pay for hauling it away, and for selling it below cost. If there is any money left over, he will get it. This may or may not cover the cost of trucking. Many outsiders don't understand that an assured income promotes efficiency. It's simple; the farmer who knows that he can pay for her will be able to buy a higher producing cow, while uncertainty of income will leave him with a poorer one. Since the cost of production is adjusted every few years to that of the average efficient producer, the consumer gets the benefit in the long run. In consolation, you should know that only the producers of milk, eggs, broiler chickens and turkeys have quotas on food production. All the other products, although some have marketing boards, such as hogs, cattle, vegetables, wheat and you name it, do not tailor production to consumption. Therefore these products change drastic- ally in price from one year to the next. I hope that this explanation has cleared up some misunderstandings. If you have any questions regarding this topic, please drop Rural Voice a line, or give us a call, Sincerely Adrian Vos — CLAY Silo Unloaders Feeders Cleaners Liquid Manure Equipment Hog Equipment — BUTLER Silo Unloaders Feeders Conveyors — FARMATIC Mills Augers. -etc.- — ACORN Manure Pumps Cleaners Heated Waterers — WESTEEL — ROSCO — Granaries — B&L Hog Confinements Systems Ventilation Systems LOWRY FARM SYSTEMS at Amberley [R.R.#1, Kincardine] Phone 395-5286 THE RURAL VOICEIMARCH 1980 PG. 19