The Rural Voice, 1993-10, Page 20Agrilaw
'When is a deal a deal not a deal?'
Between 1988 and 1992, the
Ontario Cream Producers Marketing
Board and the Ontario Milk Market-
ing Board instituted a program
whereby cream producers could
convert cream quota to milk quota.
Thc rationale for "The Conversion
Program" was to allow cream
producers who were desirous of
becoming milk producers to convert
cream quota to milk quota, thereby
allowing them to become milk
producers.
Thc program provided that a
cream producer could convert cream
quota to milk quota providing that the
converter had been a producer for a
minimum of three (3) years. As well,
it was a term of the program that, on
conversion, one-third of the quota
being converted from cream quota to
milk quota would be retired; a produ-
cer converting cream quota to milk
quota, at the end of the day, held one-
third less milk quota than he had held
of converted cream quota.
BLUE WATER ANGUS
ASSOCIATION
,t//111(11/(1(1/
39TH ANNUAL SALE
t Saturday, Oct.16/93 SC
âś“JJIJIJJJJJJJJJ 1
1.00 p.m. - Select Auction Service
4 km. W. of Durham
Sale consists of young
productive registered cows
and heifers (some with calf at
side.) Also, Targe selection
of Angus and Angus X
commercial cows and heifers.
For catalogues contact:
Sale Chairman - Don Currie
705-445-1526
or
Secretary - Edythe Dixon
519-369-5200
16 THE RURAL VOICE
During the lifetime of the program,
approximately 200 producers took
advantage of this opportunity and
converted cream quota to milk quota.
Recently, in 1993, after the
expiration of the
four-year
program, the
Ontario Milk
Marketing Board
and the Ontario
Cream Producers
Marketing Board
announced a new
conversion pro-
gram designed to
reduce the
amount of cream
quota on the
market and to
attempt to
achieve the
ultimate goal of having both cream
and milk quota administered by one
body, as opposed to the two boards
now in existence.
However, unlike the provisions of
the first Conversion Program, this
program, as originally announced,
does not require that, on conversion,
any portion of quota being converted
from cream to milk be retired; the
conversion rate is one to one.
Upon announcement of the
program, approximately 115
producers signed contracts to convert
various amounts of quota. However,
as quickly as these 115 producers
signed up for the new program,
complaints were being heard, in
volumes, from producers who had
previous converted under the old
program. These producers objected
to the terms of the new program,
arguing that it was unfair that, when
they converted, it was a term of
conversion that quota be retired
while, pursuant to this new program,
it is open for producers to convert
without any loss of total quota
converted.
As a result of these complaints, a
special tribunal examined the matter
and made certain recommendations to
the Boards. The tribunal concluded
that there did appear to be inequities
with respect to the two programs and
Speaking
of the
converted .. .
suggested that the issue be revisited
by the Boards. Pursuant to these
recommendations, the Boards
announced an intention to re-examine
the new program.
This decision to revisit the matter
resulted in producers who had con-
tracted to convert under the second
program fearing that their contracts
with the Boards would not be hon-
oured. As a result, these producers
determined that, if the contracts were
not honoured, they would have no
choice but to proceed with a Class
Court action.
As of now, it appears that the
boards have determined to deal with
the problem by agreeing to, post
facto, compensate producers who
converted during the first program by
allocating additional quota equal to
ten per cent (10 per cent) of their
current eligible quota which is
defined as "an applicant's eligible
MSQ his/her average dairy year
butterfat shipments made during the
two dairy years prior to the dairy year
of application and shall not exceed
the minimum MSQ allotment held by
the applicant during the three-year
period prior to conversion".
It still remains to be seen whether
this solution will be sufficient to
appease and satisfy the two classes of
converters. It also remains to be seen
how, in future, if it is deemed
necessary, the Boards will go about
attempting to reduce quota in the
market, having been through this
experience. Regardless, however, of
which side you are on, you cannot
help but be left wondering as to when
a deal is a deal is not a deal!0
Agrilaw is a syndicated column
produced by the full service London
law firm of Cohen Highley Vogel &
Dawson. Paul Linley, an associate in
the firm, practises in the areas of civil
and commercial litigation. Agrilaw
is intended to provide information w
farmers on subjects of interest and
importance. The opinions expressed
are not intended as legal advice.
Before acting on any information
contained in Agrilaw, readers should
obtain legal advice with respect to
their own particular circumstances.