Guidelines on the Process towards Designation as a Representative Association under Section 12 of the Farm Products Marketing Act

Table of Contents

• General Description
• Criteria for Review of Requests by the Commission
• Applicant Organization
• Designation Process
• Application Requirements

General Description

Designation as a representative association under Section 12 of the Farm Products Marketing Act (FPMA) means that:

the association represents all producers in Ontario, or a specific part of Ontario, of a specific farm product,

producers of the farm product are deemed to be licensed,

producers are required to pay licence fees to the association unless specifically exempted in the regulation that establishes the designation, and

the fees collected must be used by the association to stimulate, increase and improve the producing or marketing of the farm product by advertising, education, research or other means.

Final approval of a designation is made by Ontario Cabinet, following a recommendation of the Ontario Farm Products Marketing Commission (Commission) to the Ontario Minister of Agriculture, Food and Rural Affairs. The Lieutenant Governor in Council (LGIC) then approves the required regulation.

Criteria for Review of Requests by the Commission

The Commission will review all requests against several criteria including, but not limited to:

• Cost/benefit to the industry and province.
• Strength of the strategic plan and of the operational plan.
• Percentage of total producers of the product who are members of the organization.
• Evidence regarding the extent to which information on the request for designation, including the proposed program and its costs and benefits, has been provided to and discussed with all producers of the product.
• Evidence regarding the extent to which information has been provided and discussed with other affected stakeholders (e.g. dealers, processors, trade, consumers).

Applicant Organization

An organization requesting designation must:

• a) be an association of producers of a farm product other than a regulated product. (A regulated product is one that has marketing authorities under the FPMA or Milk Act),
  b) be incorporated under the Agricultural and Horticultural Organizations Act or the Not-for-Profit Corporations Act, 2010, and
  c) have the objectives of stimulating, increasing and improving the producing or marketing of the farm product by: advertising, education, research or other means.

Designation Process

Designation as a representative association under Section 12 of the FPMA is a multi-step process that normally takes several months or more to complete. The following provides a guideline on the process but each application will be considered by the Commission on an individual basis.

• Step 1
  The organization contacts the Secretary to the Commission, to express an interest in becoming a Section 12 representative association. A marketing analyst will be assigned to work with the organization. The analyst will work closely with the organization to provide advice on developing a request to the Commission for a designation, and on an ongoing basis throughout the entire process.
• Step 2
  The organization submits a written request and proposal to the Commission. (Refer to the "Application Requirements" section below).
• Step 3
  The Commission reviews the organization's request and proposal. (Refer to the "Criteria for Review of Requests by the Commission" section above.).
• Step 4
  One or more meetings will be held between the representatives of the organization and the Commission to discuss the proposal and application. Meetings may occur at any time during the process.
• Step 5 (a)
  The Commission decides whether or not to proceed. The Commission may require more work before proceeding. If however, the Commission decides not to proceed at this point, the organization may submit a revised proposal at a future date.
• Step 5 (b)
  If the Commission decides to proceed, the Commission holds an Expression of Opinion vote among all Ontario producers of the farm product. (Please refer to the Commission factsheet "Producer Expression of Opinion Votes"). The organization must work with the Commission to develop the voting list. Steps must be taken to ensure that the list is as comprehensive as possible. This may include the placement by the organization of a public notice in a general farm newspaper or trade magazine, etc.
• The purpose of the vote is for the Commission to assess if the majority of the Ontario producers are in favour of both the group's designation as a representative association and the group's proposed program.
• Step 6
  If the Commission supports the proposal, it recommends to the Minister of Agriculture, Food and Rural Affairs that the organization be designated as a representative association. The recommendation is accompanied by the Commission's analysis of producer support, and industry support, and an assessment of economic benefits and costs, and any other relevant information. (See "Criteria for Review of Requests by the Commission" above.)
• Step 7
  If the Minister supports the recommendation, notice of the proposed regulatory amendments are posted on the Ontario government's regulatory registry to seek any comments. If the Minister remains supportive after reviewing the feedback, the Minister then makes a recommendation to the Cabinet to approve the designation of the group as a representative association. If Cabinet supports the Minister's recommendation, the Lieutenant Governor in Council makes the regulation. Such regulations can only come into effect on January 1 or July 1.

Application Requirements

The request and proposal to the Commission should include:

A. Data

• A list of all producer members of the organization.
• A copy of the organization's or corporation's by-laws.
• A proposed definition of the farm product.
• A proposed definition of a producer of the farm product.
• An estimate of the total number of producers of the product and of production in Ontario.
• A petition in favour of support for the proposal signed by at least 15% of the total estimated number of producers.
• Any other information requested by the Commission

B. Licence Fee Proposal

• Details regarding the suggested licence fee and the proposed procedure for collection of licence fees payable by the producer. As the licence fee is established in the regulation and cannot be changed by the designated association itself, it is important that careful consideration be given to the licence fee.
• Details of any exemptions from payment of licence fees.

Request for a Licence Fee Adjustment

A change to the licence fee must be approved by the Cabinet. When a Section 12 representative association desires to change the licence fee, it must make a request to the Commission. The approval process is similar to the original designation process. At the discretion of the Commission, that process may or may not include an Expression of Opinion vote. Factors that the Commission may consider when deciding whether or not to hold a vote include, but are not limited to:

• the length of time since the establishment of the representative association or since the last adjustment to licence fees,
• the degree of consensus that appears to be in the industry,
• the percentage of the increase/decrease requested,
• state of the industry, and
• state of the representative association.

C. Documentation on the level of Support for the Proposal by Affected Stakeholders

• Evidence that the request for licence fee authority, the proposed activities of the association and its cost/benefit have been provided to and discussed with all producers.
• Evidence that the request for licence fee authority, the proposed program and the anticipated effects on their business practices have been provided to and discussed with all affected stakeholders, e.g. the purchasers of the product and other appropriate stakeholders in the industry.
• Any information available on support for or negative reaction to the proposal by the affected parties.

D. Strategic Plan

The long term (three to five years) strategic plan should address the following elements:

• Mission Statement
• Situation Assessment
• Strategy
• Long Term Objectives
• Financial Projections allocated across the activities of the representative association (e.g. research, promotion, etc.)
• Cost-Benefit Analysis for the Industry

E. Operational Plan

A one-year Business Operational Plan should include the following:

• Objectives
• Action Plans (e.g. marketing, research, education, etc.).
• Financial Plan (e.g. a quarterly/monthly projection of income and expenses).
• Staffing and operation of association office (e.g. location; proximity to producers and customers, responsibilities of staff, etc.).