Quota policy changes

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Source: Alberta Milk Board, Tom Kootstra

At the February 18, 2020 Alberta Milk Board meeting, the board supported the formation of a Quota Management Issues Team (QMIT). QMIT was tasked to explore some of the issues that were identified by producers relative to quota governance and management and identify possible solutions. The issues identified by producers include, but are not limited to, the following:

  • Quota is not readily available for producers who wish to purchase quota.
  • The price of quota is deemed to be too high.
  • The Quota Exchange is deemed to be under-utilized.
  • Alberta’s quota continues to be under allocated within the WMP.
  • Some of Alberta Milk’s quota policies are not aligned with the policies in the WMP.

The QMIT conducted technical analysis and cross–jurisdictional scans of quota policies across Canada and within other supply managed commodities in Alberta. They also reviewed the Quota Governance and Management Principles as developed in 2017 by the Alberta Agricultural Products Marketing Council and the supply managed marketing boards. These principles are as follows:

  • The marketing board has the full legal responsibility and accountability for quota that is allocated to the province.
  • Quota is a producer’s responsibility, authorized by the marketing board, to fulfill the market demand obligations of the industry.
  • Producers have the full responsibility to be actively engaged in producing the quota that they have been allocated by the marketing board.
  • Marketing boards cannot assign monetary value to quota.
  • The intention of quota is to ensure the market demands for the regulated product are met in a timely and orderly fashion.

Producer information sessions were held in Lethbridge, Red Deer, Leduc and Westlock on July 15 and 16, 2020 to discuss the work QMIT had conducted. Following these information sessions, a producer workbook was sent to all producers to provide feedback to the board on various options that were identified.

In making its decision, the board considered the following factors:

  1. The board’s responsibility is to provide leadership for the industry and do what is best for the industry as a whole – which may differ from what is best for individual farms.
  2. The need for Alberta Milk’s quota management policies to be aligned with the Quota Management Principles as outlined above.
  3. The need for Alberta Milk to be more aligned with the other milk marketing boards in the WMP and the P5. The need for closer alignment has been advanced by the trade agreements which have moved us more to a national market perspective rather than a provincial only perspective.
  4. Input from producers gathered from the survey conducted in August 2020.

In considering these four factors, the board made the following decisions:

  • Producers can sell up to 10% of eligible annual quota credits in a 12-month rolling period, subject to board ability to implement policies (which can include incentive days and credit day restrictions) to either incent or reduce production. Timeline for implementation is August 1, 2021.
  • A policy will be developed by August 1, 2021 whereby there would be less of a restriction on credit day usage (when restrictions are put in place) for new producers who own 60 kg or less of quota.
  • All quota sales and purchases (except for whole farm transfers and family transfers) must be transferred via the Quota Exchange. This change will commence on January 1, 2021. (December 15, 2020 Quota Exchange deadline.)
  • The maximum bid to buy quota on the Quota Exchange will remain at 30 kgs.

For further details about the results of the survey, please visit the Members’ Only website