British Columbia Milk Marketing Board. Specialty Production Policy & Program Guide

Transcription

1 British Columbia Milk Marketing Board Specialty Production Policy & Program Guide Zahra Abdalla- Shamji

2 BRITISH COLUMBIA MILK MARKETING BOARD SPECIALTY PRODUCTION POLICY & PROGRAM GUIDE TABLE OF CONTENTS Producer Policies 1) Provincial 95% Quota Maintenance Policy ) Eligibility to Participate in Sleeve ) Specialty Sleeve Allocation Policy at Mid-Year ) Specialty Sleeve Transfer Policy ) Eligibility to Participate in Allotments ) Special Allotments ) Differential Allocations ) Specialty Year End Allocation Policy ) Specialty Pre-fill Policy ) Quota Sale Policy ) Specialty Swap Policy ) Specialty Producer Invitation Policy ) Organic Incentive Policy ) GEP Participation in Specialty Production Policy ) Minimum/Margin Policy ) Solid Non-Fat (SNF) Policy ) Specialty Producer and Processor Levies and Pricing ) Specialty Pooling Policy ) Requirement to Provide Organic Certification ) Specialty Conversion to Conventional Production Policy or Vacating the Industry ) Organic Incentive Quota Equalization Policy... 9 Vendor Policies 22) Drop off Charges ) Processor Commitment Termination Policy

3 DEFINITIONS General Allocation means quota allocated to British Columbia from the Canadian Dairy Commission that is used for the production of milk Incentive Quota means quota provided to a new specialty producer for the purpose of the production of organic milk. The quota is subject to 10/10/10 and LIFO if sold and can be used only for specialty production Non-Allocated Quota means quota that is transferable and was not previously allocated Premium means funds set by the Board, paid by vendor to compensate for the higher cost to the specialty producer Specialty Allotment means quota provided to a specialty producer for the purpose of the production of organic milk. The quota is subject to 10/10/10 and LIFO if sold and can be used only for specialty production Specialty Producer means a Producer who is the holder of a valid and subsisting certificate issued pursuant to the Agri-Food Choice and Quality Act, S.B.C. 2000, c. 20 and the Organic Agricultural Products Certificate Regulation, B.C. Reg. 200/93 or such other standard and regulation approved by the Board certifying that the Producer meets the standards applicable to organic farming; Specialty Production means organic Qualifying Milk produced by a Certified Organic Producer. Specialty Quota Exchange means a Quota Exchange that is run only for specialty producers Specialty Total Production Quota (STPQ) means total production quota that is used for specialty production Total Allowable Production means STPQ + Sleeve + Allotments Transferable Quota means any quota converted by a producer from conventional to specialty and does not include specialty quota allocated by the Board 3

4 Producer Policies 1) Provincial 95% Quota Maintenance Policy a) If the province ships below 97% of its allowable production for the period ending January 31 st : i) Individual specialty producers who ship less than 97% of allowable production for the period ending January 31 st: will have their allowable production suspended by a pro-rata share of the difference between the target and the actual provincial production for the balance of the dairy year quota will be reinstated the following dairy year ii) Individual specialty producers who ship less than 95% of allowable production for the period ending January 31st: will have their allowable production further suspended by the difference between actual production and 95% the suspended production is reallocated on a pro-rata basis for the remainder of the dairy year to producers who shipped 97% or greater for the period ending January 31 quota will be reinstated the following dairy year b) If BC as a province ships above 97% for the period ending January 31st: i) Individual specialty producers who ship below 95% of allowable production for the period ending January 31st: will have their allowable production reduced and suspended for the balance of the dairy year (difference between actual production and 95% allowable production) quota will be reinstated the following dairy year quota is reallocated to producers who shipped 97% or greater (as at January 31) of their allowable production on a pro-rata basis reallocated quota is identified separately and will not be available for sale or purchase National Quota Management Policy (October 2008) Provinces have a flexibility range with a lower limit set at -1.5% and an upper limit set at +0.5% of their total annual quota. Annual quota is the sum of the most recent twelve months quota (MSQ + Deemed Class 1 sales + exclusion milk + innovation milk). Any cumulative underproduction below the lower limit of -1.5% is considered a lost production opportunity. Any cumulative over quota production in excess of the +0.5% upper limit will receive zero payment and would be subject to an additional financial penalty of 50% of blend return 4

5 2) Eligibility to Participate in Sleeve a) Specialty producers must be in operation at the time the Board implements a production sleeve to be eligible to receive a share of the sleeve b) If a sleeve is issued by the Board, a specialty producer must indicate intent to produce the sleeve through a written document to the BCMMB 3) Specialty Sleeve Allocation Policy at Mid-Year a) If a specialty producer falls below 97% at the midyear reconciliation, that producer may not be eligible to participate in any quota allocation or further sleeve allocation for the balance of that dairy year. 4) Specialty Sleeve Transfer Policy a) Specialty producers can transfer sleeve and transferable STPQ among their own specialty farms. 5) Eligibility to Participate in Allotments a) Specialty producers must be in operation at the time the Board makes a quota allotment to be eligible to receive a share of the allotment i) A producer must be in operation on August 1 to get an allotment for the next dairy year ii) If a producer has not been in operation a full year; a prorated allotment may be allocated based on number of months in operation in the previous 12 months prior to the allotment 6) Special Allotments a) Allotments by the BCMMB on sleeve will be based on actual allowable production 7) Differential Allocations a) The Board has the authority to allocate quota and sleeve between and within the conventional and specialty sectors 5

6 8) Specialty Year End Allocation Policy a) If a specialty producer falls below 95% of allowable production at the end of the dairy year, that specialty producer may not be eligible to participate in any quota allocation or sleeve for the balance of the next dairy year. b) Specialty producers may have any general allotments subtracted from sleeve and /or specialty allocations through the dairy year i. For example, if a 1% general allotment is distributed August 1 and a 20% sleeve is issued to the specialty producers, specialty producers will receive: o 1% allotment o 19% sleeve 9) Specialty Pre-fill Policy a) If a specialty producer exceeds 100% of allowable production at the end of a dairy year, that specialty producer will not receive payment for over quota production up to 100.5%, but will not have that over quota production up to 100.5% considered pre-fill for the following dairy year. b) Specialty producers that ship in excess of 100.5% of allowable production are pre-filled for the difference between 100.5% and actual production in August of the new dairy year c) If a pre-filled specialty producer remains within allowable production for the new dairy year, the specialty producer is eligible for payment on last year s pre-fill at the end of the dairy year d) Specialty producers are paid zero dollars for any milk shipped over quota. 10) Quota Sale Policy a) Subject to clause 20, transferable quota may be sold through the quota exchange if a producer ceases specialty production b) Subject to clause 20, STPQ with the exception of whole farm transfers, must be sold through the specialty quota exchange subject to the appropriate assessment policy and can be used only for specialty production. 11) Specialty Swap Policy a) Specialty producers are permitted unlimited access to swapping in/out transferable quota within the specialty pool. Specialty producers are not permitted to swap sleeve. b) Specialty producers are not permitted to swap specialty quota from/to the conventional pool without BCMMB approval. c) The minimum amount of any quota swap is fixed at 100 kilogram 6

7 12) Specialty Producer Invitation Policy a) Producers interested in converting to specialty production or in starting out as a specialty producer must submit a written request to the BCMMB; all requests will be placed on a waiting list based on production volume, timeframe to become organic and year of certification b) Any individual is entitled to pursue specialty certification through a certifying body recognized by the BC government and/or Canadian government c) Board approval is required to all current specialty producers wanting to increase quota holdings; Requests will be held on a specialty wait list and will be addressed based on need in the specialty industry d) Only those producers who receive a commitment from the Board will be entitled to receive premium on the milk they ship 13) Organic Incentive Policy a) Any organic producer who is actively engaged in organic production and has not previously received a specialty allocation from the Board, is eligible to receive a onetime incentive quota equivalent to 20% of non-allocated quota (up to a maximum of 5,000 kg) b) Organic producers cannot benefit from incentive quota on more than one farm c) All incentive quota will be subject to 10/10/10 and LIFO policies and can be used only for specialty production 14) GEP Participation in Specialty Production Policy a) GEP producers interested in specialty production are required to put their names on the specialty wait list for Board commitment on premium b) GEP Entrants may receive 20% of non-allocated quota (up to a maximum of 5,000 kg) as incentive quota upon organic certification, provided the GEP entrant is invited to produce specialty milk from the wait list 15) Minimum/Margin Policy a) Due to the limited size of the industry (production and processing), and to ensure that milk is available for processing to satisfy processor orders, specialty producers are subject to a minimum/margin policy of 80/20 7

8 16) Solid Non-Fat (SNF) Policy a) Provincial Target is ; Specialty producers are required to maintain the following guidelines: i) Red Zone - producers over will be penalised monthly ii) Yellow Zone producers between may be penalised at year-end iii) Green Zone Producers under will not be penalised Red and Yellow zone producers are responsible for payment if BC does not meet its provincial target. 17) Specialty Producer and Processor Levies and Pricing a) With the exception of premium, all specialty producers and processors are bound by the same levy and pricing structures as conventional producers Levy Structure (July 2009) Producer Admin levy $0.21/hl on all milk DPPF levy for fluid promotion $0.73/hl on all milk DFC levy for industrial promotion $0.97/hl on industrial milk only DFC levy for skim off $0.11/hl on all milk Producer association levy $0.105/hl on all milk MC&L Enviro rebate plus shrink rebate $0.29/hl on all inquota milk 18) Specialty Pooling Policy a) Growing Market i) All specialty milk is pooled b) Declining market i) All specialty milk is pooled. Specialty producers will have milk shipments retracted equitably subject only to previously agreed volumes for those producers who were shipping or producers who had agreements to ship November 1, ) Requirement to Provide Organic Certification a) All organic producers, processors and transporters are required to provide evidence of their organic certification on an annual basis b) Certificates must be from an accredited organic certifying body recognized by the BC government and/or Canadian government. c) Expired certificates may result in suspension of participation in the specialty industry until such time as a valid certification is provided to the BCMMB d) Loss of organic certification Allotments may be subject to retraction 8

9 20) Specialty Conversion to Conventional Production Policy or Vacating the Industry a) Specialty producers must give twelve months written notice (or specialty producer will be subject to penalties/restrictions) to the BCMMB for conversion to the conventional pool i) Downsizing /leaving the industry Specialty quota that has been allocated will be retracted on a prorated basis based on the 10/10/10 and LIFO policy 21) Organic Incentive Quota Equalization Policy a) Organic producers who are actively engaged in organic production and have not previously received a specialty allocation from the Board, are eligible to receive incentive quota equivalent to 20% of non-allocated quota (up to a maximum of 5,000 kg) less the quota allocation from the 2008/2009 sleeve allocation on August 1, 2009 Vendor Policies 22) Drop off Charges a) Processors are required to pay a drop off charge for every round trip delivery of specialty milk 23) Processor Commitment Termination Policy a) Processor commitments will be applied on a six month rolling basis. b) Processors must confirm commitments to the BCMMB on a monthly basis. i) The BCMMB will provide a form that must be sent in with the D147 every month ii) Processors who do not confirm the commitment on this form and in this manner will be held to the previous months commitment c) Processors must guarantee 95% of the premium based on commitments; Processors will not be in good standing with the BCMMB if this condition is not met 9