Invoking her authority to change or erase some or all of a ruling by her own ministry’s appeal tribunal, Ontario Ag Minister Carol Mitchell has laid out her own plan to have a dual-marketing system for hogs in the province by December.
Mitchell in March undertook a ministerial review of a February ruling by the Agriculture, Food and Rural Affairs Appeal Tribunal, which reinstated sections of the provincial Farm Products Marketing Regulations revoked in October 2008 by the Ontario Farm Products Marketing Commission (OFPMC).
The OFPMC’s 2008 ruling had directed Ontario Pork to convert itself from a mandatory single-desk model to an optional marketing agency for Ontario hog farmers, and to put a plan in place by March 2009 to do so.
But the commission’s order was stayed by the tribunal after some farmers and other industry players appealed it.
The appeal tribunal’s February decision restored Ontario Pork’s single desk, but also called to exempt all Ontario hog producers from it for at least 18 months, giving the pork board time to complete its consultations and governance reviews toward a new marketing structure.
“This decision is about providing Ontario’s hard-working farmers with a clear, predictable, and stable means to market their hogs,” Mitchell said in a release Thursday.
As per her review, the province’s 2,300 producers will be able to choose to sell their hogs directly to buyers — or through an intermediary, such as Ontario Pork, which would still offer marketing services to producers and processors.
Mitchell’s decision Thursday also directs the OFPMC to “work with the Ontario Pork Producers Marketing Board to consult with the sector on implementation.”
She also confirms the pork marketing board’s powers to collect and share price data in the aggregate, and extends the power to collect fees on all classes of hogs.
“(M)y decision should not be taken to mean that I do not have confidence in the (appeal) tribunal,” Mitchell wrote, but “as the tribunal readily pointed out in its decision, the adversarial process is not necessarily well-suited for resolving complex policy-laden questions.”
Often, she wrote, opposing parties in such disputes “present their favoured position(s) without examining or providing information to capture the larger policy issues in which their dispute(s) arise.”
To get an open market system in place, Mitchell wrote, “I believe that all necessary changes should be in place by no later (than) Dec. 4,” as that will give affected hog farmers time to deal with their fieldwork.
Ontario Pork’s fiscal year also ends at about that time, she said, which beats having to make major changes in the hog marketing system halfway through the year.
Also, she said, Dec. 4 “should provide more than enough time for the commission and the board to work out the logistics of the transition. This should, in turn, allow for a smoother transition, thereby minimizing any disruption to Ontario’s hog industry.”
Furthermore, where the appeal tribunal gave Ontario Pork 18 months to complete its governance review and hold a plebiscite on changes, Mitchell wrote that the tribunal has now been “overtaken by events, and the board has gained support from producers for its governance proposal.”
Thus, she said, “further consultation is no longer necessary” and the pork board can submit its planned changes directly to the OFPMC.
Mitchell, in her decision, said she would “encourage the board to continue to offer its marketing expertise to Ontario’s hog industry” but noted Ontario Pork would have to conduct business “somewhat differently,” separating its marketing side from its regulatory side to eliminate any potential conflict of interest.
Such a division, Mitchell said, “would also have to include separating any fees the board may receive for its regulatory functions from its marketing functions, in order to ensure that the board is not receiving an unfair competitive advantage over others who may want to offer marketing services.”
Furthermore, she ordered, the board will “no longer have the authority to approve contracts. Rather, the board will only have the authority to review contracts and provide comments when a party to the agreement requests its assistance.”
But in her ruling, Mitchell confirmed the appeal tribunal’s position that Ontario Pork should have the authority to collect fees on all classes of hogs.
“If the board is going to retain some of its regulatory functions, it will (in light of my decision below) require a source of revenue to do so. Therefore, it makes sense that the board be able to impose a reasonable fee to cover its operating expenses.”
That said, “I want to make it clear that I also expect that the (Ontario Pork) board will consult with all hog stakeholders, including the commission, on its proposed method of collecting the fee as well as the quantum of the fee before implementation.”
On the pork board’s role in gathering and providing price information, Mitchell also agreed it’s “important to have a body be able to collect and provide information to Ontario’s hog industry.
“Given the board has expertise in the collection and dissemination of information as well as knowledge on the pricing of hogs, it makes sense that the board has the authority to undertake this activity.”
Suggestions on how to make a dual marketing system “workable” included a proposal from Ontario Pork that it should be able to license hog producers. The OFPMC could grant Ontario Pork that authority, she said.
The idea has merit, she wrote, as the board could use the licenses for traceability purposes — plus, in terms of the fees charged to cover board expenses, it’s “a rather simple solution in terms of both enforcing the fee as well as collecting the fee.”
Mitchell disagreed with the appeal tribunal in its assessment of the provincial Farm Products Marketing Act. The tribunal’s view of the Act, she said, “is too narrow and does not respect the policy choices that are available (and indeed must be available) to regulate a regulated product.”
“Flexible and fluid”
In other words, she said, the Act “does not set out that a single type of regulatory system must be in use for a regulated product in Ontario, and to reach a contrary conclusion undermines the true policy objective of the (Act), which is to allow for a flexible and fluid regulatory system for all regulated products in Ontario.”
Mitchell also rewrote part of the tribunal’s ruling, saying she supports the OFPMC’s open-market approach for the hog industry in the province, adding it “will help to create stability in Ontario’s hog industry by resolving an outstanding issue that has been ongoing for more than 10 years now.”
The tribunal’s decision, she wrote, would have allowed the issue of hog marketing to go unresolved for at least another 18 months — and possibly longer if by that time the hog industry is still divided.
“This allows for more uncertainty within the hog industry, which, from a policy perspective, is not desirable,” Mitchell wrote.
Mitchell also noted a board suggestion that if an open market system is put in place, it would also like to have some type of swine financial protection program also put into place, similar to what already exists for the livestock and grain sectors.
“I see merit in developing a detailed proposal for a financial protection program, modeled on what exists in the grain and livestock industries,” she said, noting ag ministry staff would be available to work with Ontario Pork to develop it.