Quota transfer assessments (2014)

In this supervisory review, the B.C. Farm Industry Review Board (BCFIRB) invited regulated marketing boards and commissions to propose changes to quota transfer directions issued as part of the 2005 Specialty Review.

What was decided

BCFIRB reviewed recommendations from the regulated marketing boards and commissions that oversee supply-managed sectors.

Following the review, BCFIRB:

Determined that quota transfer policy issues deserved further evaluation
Advised the supply-managed boards that it would consider proposed changes to transfer assessments later

This led to the launch of the Quota Assessment Tools Evaluation project in November 2016.

BCFIRB also issued two decisions on sector-specific recommendations (below)

Decision on sector-specific recommendations for Milk Marketing Board (PDF, 328KB)

Decision on sector-specific recommendations for Egg Marketing Board (PDF, 248KB)

Sector-specific decisions

BC Milk Marketing Board

Approved the proposed Graduated Entrant Program (GEP)
Required BCMMB to limit “double-dipping” by GEP applicants also receiving quota via family transfer
Approved a proposed change to whole-farm transfer policy, limiting merging or transferring quota for 10 years

View the full BC Milk Marketing Board decision

BC Egg Marketing Board

Directed BCEMB to resume its new entrant program, with at least two new producers added each year
Directed BCEMB to re-establish the Egg Industry Advisory Committee
Reviewed proposed distributions of quota from national allocation and BCEMB’s reserve

View the full BC Egg Marketing Board decision

Why BCFIRB conducted this review

As part of the 2005 Specialty Review, BCFIRB:

Developed a set of principles for quota management
Gave direction to the supply-managed boards and commissions on managing the transfer of quota between producers

In 2014, BCFIRB received proposed recommendations to transfer assessments from the:

B.C. Milk Marketing Board
B.C. Chicken Marketing Board
B.C. Egg Marketing Board

The boards’ proposals included:

Exemption from transfer assessments when transferring quota to direct family members
Exemption from transfer assessments when restructuring from a partnership to a corporation
Extending family member transfer assessment exemptions to nieces, nephews and grandchildren
Amending the 10/10/10 last in—first out transfer assessment to 20/6/0

On July 8, 2014, BCFIRB invited the BCTMB and BCBHEC to submit their own recommendations.

Goals of the review

The review enabled the supply-managed boards and commissions to:

Provide analysis of changes in their sectors since the 2005 Specialty Review
Propose changes to BCFIRB’s directions related to quota transfer assessments

Events leading to the review

2003: Specialty Review begins

BCFIRB launches a review of specialty production and marketing across B.C.’s five supply-managed boards.

2004: Policy framework released

The B.C. Ministry of Agriculture, Food and Fisheries releases the Regulated Marketing Economic Policy (PDF, 40KB). This public policy framework guides how the regulated marketing system should operate.

2005: Directions to supply-managed boards

BCFIRB gives general directions to all supply-managed boards. These directions cover specialty production, new entrant programs, and other quota-related programs. BCFIRB plans a formal performance review by 2008.

2012: Governance principles adopted

BCFIRB and the regulated marketing boards and commissions adopt the SAFETI principles to guide decision-making.

How quota transfer assessments work

Quotas set limits on how much of a supply-managed commodity each province and territory can produce. A quota is a licence to produce a set amount of product within a set period.

Supply-managed boards regulate and approve transfers of quota between producers. When a producer transfers quota, these boards may require part of that quota to be returned to them. This is called a “transfer assessment”.

As part of the 2005 Specialty Review, BCFIRB created two policy tools to manage transfer assessments:

‘Last in—first out’ (LIFO): requires a producer to transfer the last quota they received first
10-year declining transfer assessment (10/10/10): defines how much quota returns to the board or commission when it is transferred. Transfer assessments decline based on how long a producer has held the quota

Between 2005 and 2014, supply-managed boards submitted various requests to amend the 2005 directions. BCFIRB approved or denied these requests on a case-by-case basis.