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The Producer Review Board Holds a Meeting

This past Wednesday, the Producer Review Board (PRB) held its first meeting of the year. The first order of business was to elect a new chairman and vice-chairman. Former Milk Producers Council Board Chairman Fred Douma was selected to be the chairman and Arie De Jong was elected Vice-Chairman.

Next Donald Shippelhoute, the California Department of Food and Agriculture’s (CDFA) Quota Implementation Plan (QIP) administrator, reported about how the QIP program was operating. He said that for the most part it was going well. He said there were a few minor collection problems, but overall things were going smoothly. He also indicated that the $.38 assessment was collecting enough money to fund the quota payment and in fact there might be an opportunity in a few more months to reevaluate the level of the fee.

The next important item for the PRB was to work with the CDFA attorney to revise the “Procedures for Submitting a Petition for Substantive Amendments or Termination of the Quota Implementation Plan.” Last December, the PRB had developed a document that outlined these procedures, but after legal review, it was determined that some modifications needed to be made. It took a bit of discussion, but in the end, the changes the CDFA lawyer recommended were made to the document. In short, some of the more onerous verification requirements in the December document were modified.

During the various discussion times of the meeting, a number of important questions were asked about who can sign a petition and who is eligible to vote in a referendum. The QIP document itself says that in order for a petition to be valid it requires “a petition signed by at least 25 percent of market milk producers.” So the question is who is a producer? The answer given by CDFA is that there is a two-fold test of who is a producer. The determination of a producer is based on the tax identification number for the dairy. If an individual owns multiple dairies that have the same tax ID number then all of those dairies are counted as one producer. If an individual has multiple dairies and they all have different tax ID numbers then each tax ID number is a separate producer with the ability to provide multiple signatures on a petition.

For the purposes of submitting a petition, only the number of Grade A producers in California that are covered by the QIP matters, not the volume of milk produced by those producers. The question was asked, how many producers are there right now that are eligible to sign a petition? CDFA did not have an answer to that question, but it is a smaller number than the 1,250 pooling certificates that exist currently since a number of those dairies are owned or covered by a single tax ID number.

On the question of how a referendum would be handled, then the volume of milk a dairy produces becomes a relevant factor. In order for a referendum to pass to change or terminate the QIP, 51% of the eligible producers must vote and of those voting either 65% of the eligible voters who produce 51% of the milk or 51% of the eligible voters producing at least 65% of the milk must vote yes. Given all the discussion and questions, the CDFA lawyer committed to preparing a document in the near future that will clearly spell out the answers to the question of who an eligible producer is.

The PRB did not set a date for the next meeting.

Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

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