On Monday, July 31, the Producer Review Board (PRB) held an in-person meeting at the Stanislaus County Ag Commissioner’s complex. The reason for the meeting was to give input to the research firm that will be conducting the required five-year survey of the effectiveness of the Quota Implementation Program (QIP).
But before getting to that item, the battle over the minutes of past PRB meetings resumed. Minutes from June 6, 2022; October 3, 2022; May 5, 2023; and June 12, 2023, were up for approval. At the June meeting, individual members of the PRB brought up changes they wanted made to the draft minutes. The Department took those comments under advisement. For this meeting, the Department staff reviewed the suggested changes and incorporated some of them into an updated version of some of the minutes. However, Department staff did not believe other member comments should be in the minutes. Those other comments were put in a document that the PRB could review. After lots of discussion, a motion was made, seconded and passed to approve all four sets of minutes together without those supplemental member comments being added. It was not a unanimous vote.
Another item discussed was the budget for administering the QIP. The current budget is around $1.15 million per year. The assessment collects about $1.2 million per year, but the costs of administering the QIP have been much less than budgeted over the past four years, which has caused the balance in the QIP Administration Fund to grow to well over $3.5 million. The PRB passed a motion to recommend that the .003 per cwt. QIP administrative fee be suspended indefinitely.
There was also a reminder that the QIP fee to fund the quota payments was reduced as of July 1, 2023, to .033 per pound of Solids Not Fat, which equates to $0.287 per cwt. on 8.7% SNF milk. This is down from $0.34 per cwt. where it has been since March of 2023.
Another significant announcement was that the Department determined that a petition it received from the STOP QIP organization on June 22, 2023, that seeks a referendum to immediately terminate the QIP is a valid petition. What this means is that the Department is currently examining the signatures submitted with the petition to determine if there are a sufficient number of producers who have signed the petition to bring it forward for consideration. The Department has 90 days to conduct this signature validation. If 25% of the eligible producers in California have signed the petition, then the process will proceed.
The PRB meeting then turned to a discussion about the contents of the five-year study. Research America, Inc., who was awarded the contract to conduct the study, had a first draft that the PRB was able to respond to. Many of the questions surround the mechanics of how the QIP program operates. There were strong opinions expressed from some PRB members that the study also needed to solicit opinions from producers about their support for the continuance of the plan. Department staff pointed to the minutes of the September 12, 2017, meeting of the PRB where the contents of Section 1100 of the QIP were debated and a final recommendation was made to the Secretary. The adopted QIP language is: “Section 1100. A producer survey shall be conducted by an independent party selected by the Producer Review Board at least every five (5) years. The survey shall evaluate the effectiveness of the Plan. The results of the review will be provided to the Producer Review Board for its consideration, and recommendation to the Secretary.”
The whole question here is what does “effectiveness of the plan” mean? There were a number of additional questions suggested by PRB members that would allow producers to expand on their thoughts and opinions of the QIP. There will be an updated survey questionnaire distributed to PRB members within the next week. CDFA wants to get the final version of the survey distributed to producers for their responses by late August with the intention of having the results compiled before November 1, which is the five-year anniversary of the QIP.
The next meeting of the PRB is anticipated to be in September.
Geoff Vanden Heuvel
Director of Regulatory and Economic Affairs