A Notice of a Public Hearing to Consider a Petition to Suspend Chapter 3.5 of the Food and Agriculture Code was posted this week by the California Department of Food and Agriculture. The hearing is scheduled for two days, April 7 and 8, and will be held at the Visalia Convention Center, 303 E. Acequia Avenue in Visalia.
The hearing will be presided over by an Administrative Law Judge who will act as the hearing officer. The hearing notice indicates that interested parties can submit written statements to the department prior to the hearing and/or present live testimony at the hearing. Witness testimony will be received under oath and a representative of the California Attorney General’s office may question any witness. However, there will be no cross examination of witnesses allowed by anyone else.
This hearing is required by law because the Stop QIP group was successful in obtaining the signatures on their petition of 28% of the number of market milk producers operating in California in January of 2020 who produced in excess of 33% of the market milk. While the hearing notice does not explicitly say this, conversations with CDFA officials indicate that it is the Administrative Law Judge who will be developing a recommendation to the California Secretary of Agriculture based on the hearing record about whether to hold a referendum to suspend Chapter 3.5.
This does get a bit technical, and I have attempted to explain this in previous articles. It is in Chapter 3.5 that CDFA received the authority from the Legislature in 2017 to create a stand-alone quota program that would function after California became part of the Federal Milk Marketing Order system. The vote threshold to suspend Chapter 3.5 is lower than the vote threshold contained in Chapter 3.0 of the Food and Agriculture Code which originally established the California pooling and quota program, which requires a super majority vote to adopt, change or terminate. Chapter 3.5 requires a 51% favorable vote to continue the Chapter. Said another way, 49.1% voting no suspends the Chapter 3.5. If Chapter 3.5 is suspended, the authority of CDFA to collect assessments to fund the quota payments is also suspended.
Meanwhile, the United Dairy Families group is circulating a petition containing their compromise quota termination program which would see the QIP continue until 2025. The process that would consider the UDFC petition when/if it gets enough signatures would start with a meeting of the Producer Review Board. Given the fact that there is now a definite hearing scheduled on the STOP QIP petition, it is not clear how the UDFC compromise plan moves forward. Stop QIP on their website makes it clear that they are opposed to a five-year sunset. The hearing is on their petition. Is there any flexibility? By anyone? Almost no one active in the dairy industry today has been down this road before. I suspect that circumstances like these did exist back in the 1960s before pooling. My guess is there was plenty of conflict and controversy then too. In the end, they came to a resolution. So will we. How is just not real clear yet.
Geoff Vanden Heuvel
Director of Regulatory and Economic Affairs