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The Rural Voice, 1982-12, Page 14CFFO grapples problem of quota value transfers By Adrian Vos. Just like supply management and marketing boards, the Christian Farmers Federation of Ontario (CFFO) has been grappling for years with the problem of quota value. Ideally, they believe quota should have no value, but they now concede this is an impossibility. In response to criticism from the public and on the demand from their membership, they have now produced a discussion paper on the issue. At a recent meeting in Clinton of the Huron Local of the CFFO, Tom Oegema, 1 st Vice-president of the provincial body, presented a draft paper for input by the local to find solutions to problems occurring when quota is transferred. 1 he basic concern of the CFFO in quota transfer is their policy of support for family -farm dominated agriculture and a decentralized agricultural produc- tion system. Thus far no one has been able to develop a system to keep commodity prices in supply management, reasonable and quota values down, all at the same time. The paper states a quota transfer policy must: support the family farm; protect the family farm; keep quota costs low; allow new farmers to enter the industry; allow small farms to grow and limit the size of family farms. The whole paper becomes useless unless the family farm is defined. The CFFO paper tries to define family farm size. It says: "Put a family farm maximum on the level of protection any one person can obtain through direct ownership and/or interest in corpora- tions." (see box) This statement needs some explanation, which is not given in the discussion paper. The paper further repeats what has been stated by consumer groups, aca- demics and those who would like to enter into dairy production, tobacco or the feather industry — that quota values are unacceptable high. An almost hidden statement states the CFFO is frustrated with the quota transfer as it stands, "which allows agribusiness and other corporate enter- prises to move into primary production for investment reasons, e.g. to secure their share of the related feed market, rather than as a way of life." Another statement says: "the profits from supply management commodities can be used to control other segments of the foodchain." Does this mean that profits in supply management are too high? The paper points to a contradiction in the present supply management philo- sophy where production and price are controlled, but not quota price. It goes on: "it is morally wrong to profit from the trade of the privilege to produce." The solution is to go to an administra- tive quota transfer, roughly along the lines of the dairy quota auction, where seller and buyer don't meet. The program is to be administered by an Independent Quota Transfer Commis- sion, (IQTC) appointed by the govern- ment. The authors of the paper believe when this happens, young producers can be guaranteed access to the industry. The IQTC can also decide when a farm is big enough and refuse further quota. The IQTC will decide when a farmer is capable as only "capable" farmers will be issued new quota. They also believe that quota value can be controlled. They propose circumven- tion of limiting quota price by an increase of the farm price can be avoided. The IQTC simply sends out an appraiser and any value above the appraised value is in reality quota value. The commission can then refuse transfers. The IQTC can also force integrators to give up their quota. The paper further concedes individual producers will lose more of their indepen- dence. Unused or no longer needed quota will be bought back by the IQTC at their real value at the time of purchase i.e. increase in value in line with inflation and no more. Of the returned quota, 3507o will be issued to new farmers. The remainder goes to eligible farmers. These are: Those not now farming, young farmers, four years of farm experience, with college or university degree in agriculture; those who own or rent a farm or who don't yet own a family farm and potential PG. 14 THE RURAL VOICE/DECEMBER 1982 farmers who can prove they are serious. Also those who didn't sell quota pre- viously. The IQTC can further issue increased quota for: those who apply first and don't farm in other commodities; those who produce less than: dairy -250 litres/day; chicken -I0,000 broilers capacity; eggs - 3,000 hens; turkeys -100,000 lbs/year, tobacco -10 acres and those who provide evidence of being serious about expansion and have been a producer for two years. Oegema said he was aware that there are still many details to be worked out before a definite policy can be adopted, but member pressure for a solution has been such that delaying the solution is not possible anymore. He hopes when the paper has gone the rounds of the various locals, the commit- tee can draft a final proposal. William (Bill) Jongejan, Huron presi- dent, announced the chairman of the CFFO, John Sikma, will not accept a new term of office and that it is probable Tom Oegema will be president after the annual convention on December 6th. Defining the family farm The Christian Farmers Federation of Ontario has made an attempt to define a family farm. To that end they issued a statement in 1980 which reads as follows: We use the term `family farm' in a qualitative sense. It is not possible to provide a precise definition. A family farm is a form of enterprise. It is unique in that all factors involved in the enterprise come from a family: the manpower comes from the family; the management comes from the family; the stewardship of resources is an integral part of family responsibility; the finan- cing of the enterprise is based on the family's personal assets and on its integrity. Some enterprises may have one factor or part of one coming from another source. These are still family farms but meet less of the ideal. We would like every enterprise to have opportunity and en- couragement to move towards the ideal.