Annual Report
For Fiscal Year
2004 - 2005

Table of Contents

Executive Summary
Mandate
Performance Targets and Operational Effectiveness
Financial Performance
Commission Members

Executive Summary

As a regulatory agency, the Ontario Farm Products Marketing Commission was responsible for the supervision of twenty-one agricultural commodity marketing boards and three Section 12 representative associations in the fiscal year 2004/05.

The Commission directed its attention and efforts in 2004/05 to contribute to a dynamic, competitive agri-food sector.

Two Expression of Opinion Votes were conducted among producers in 2004/05. In the first, goat milk producers were asked if they wished to have their commodity become regulated under the Farm Products Marketing Act. The majority of producers did not support the concept developed by a group of their peers and consequently, the Commission decided there would be no plan for this commodity at this time.

The second Expression of Opinion Vote was conducted among Ontario greenhouse pepper growers. Their opinion was being sought regarding the idea of including greenhouse peppers as a regulated commodity under the already existing Greenhouse Vegetables Marketing Plan. This Plan covered three greenhouse commodities at the time of the vote: tomatoes, cucumbers and lettuce. The vote results showed strong support for the idea, and the Minister of Agriculture and Food agreed to recommend to Cabinet that the Plan be amended to include greenhouse peppers.

In May of 2004, a new marketing plan for Ontario apples was established following an Expression of Opinion Vote which took place during the previous fiscal year.

The Commission met with Dairy Farmers of Ontario and dairy processors to consider a request to allow Omega-3 fatty acids in milk beverages. The Commission subsequently decided to approve the request within strict regulations and the dairies have responded with new milk beverages for consumers.

Stakeholders in the regulated marketing sector value the facilitation role which the Commission undertakes to help marketing boards and their buyer/processors work through issues. In 2004/05, that role was rewarded in Ontario's pork sector where a new contracting protocol is in development together with the revitalization of an industry advisory committee.

During the fiscal year 2004/05, the Commission stressed the importance of improving the relationship between the province's poultry producers and processors. The Commission was involved in the process which led to a producer-processor committee to strengthen their relationship and build for the future.

The Commission considered and rendered a number of regulatory amendments aimed at making the regulated marketing system more responsive to current needs and future opportunities. They dealt with issues ranging from food quality assurance in milk to the legal technicalities of what constitutes "processing" in the vegetable industry for the purpose of licencing processors. The Commission also fulfilled its regulatory mandate by bringing into force negotiated agreements reached between boards and their buyer/processors, and awards in those situations where final offers were submitted to arbitration.

After meeting with a cross-section of representatives from the dairy and edible oil industries in December 2004, the Commission developed regulations under the Milk Act to prohibit filled milk and cream, and regulate the composition of dairy/edible oil spreads.

The Commission is proud of an increasing use of industry advisory committees in various regulated sectors. We feel that industry developed solutions, where all stakeholders have had a say, stand the best chance of successful deployment. The Commission has active involvement in several industry advisory committees, typically in a chairing capacity.

The Commission welcomed a new Chair, Mr. Dave Hope in September, 2004. Mr. Rod Stork retired from the Commission after serving five years as Chair. Mr. Hope's chairmanship has spanned over half of the fiscal year 2004/05.

Mandate

The Ontario Farm Products Marketing Commission is a regulatory agency without a governing board. It is established under the authority of the Ministry of Agriculture, Food and Rural Affairs Act. The Commission is responsible for the direct administration of two pieces of legislation, namely, the Farm Products Marketing Act and the Milk Act. In 2004/05, that supervision included twenty-one agricultural commodity marketing boards and three Section 12 representative associations established under the legislation. While supervision of enabling legislation is a cornerstone of the Commission's agency mandate, the Commission also provides strategic leadership and intervention in the form of advice and facilitation. In addition, the Commission provides education services where it can contribute to the effective operation of Ontario's regulated marketing structure and the boards that operate under the legislation.

The mandate of the Commission is to:

  1. Administer the legislation and regulations of the Farm Products Marketing Act and the Milk Act and supervise the activities of Ontario's marketing boards and Section 12 associations to ensure that:
    • marketing boards operate within the powers and authorities given to them;
    • the lines of accountability are maintained;
    • stakeholders have an opportunity to influence how the system operates; and
    • the public policy goals of the legislation are maintained.
  2. Provide strategic leadership in the form of advice, facilitation and direction to Ontario's marketing boards and Section 12 associations.
  3. Develop, recommend and implement all policy related to regulated marketing in Ontario.
  4. Provide education programs for Ontario's marketing boards, Section 12 associations and industry stakeholders in order to increase the effectiveness and efficiency of the regulated marketing system.

The Commission is directly accountable to the Minister for its performance in fulfilling its mandate and its compliance with government policies. The Minister, in turn, is accountable to Cabinet and the Legislature for the Commission's fulfillment of its mandate and for reporting on the Agency's affairs.

The Commission is the central figure in Ontario's regulated marketing system and holds an important "public trust" in the exercise of its duties. Through its actions, it ensures that individual commodity systems operate in an effective and responsible manner with due regard to the impact of its decisions on the agri-food sector and consumers, while at the same time maintaining the public policy goals of the legislation.

Performance Targets and Operational Effectiveness

The Ontario Farm Products Marketing Commission's strategic plan is a living document. It annually focuses the Commission's initiatives as well as shaping its priorities and decision making. It is a public document, communicated with all marketing boards, representative associations, regulated industry stakeholders and the public.

The Commission's business plan sets out performance targets and goals under each of the Commission's three strategic directions. It is against these goals that the Commission's performance and operational effectiveness is measured.

The Commission's strategic initiatives in 2004/05 were focused on three areas:

  1. Ensure the effectiveness of marketing boards;
  2. Foster enhanced stakeholder relations to achieve industry solutions; and
  3. Advance Ontario's interests on regulated marketing, nationally and globally.

Strategic Focus #1: Ensure the Effectiveness of Marketing Boards

Goal: Support a strong regulated marketing system

Commitment:

  1. Ensure 100% of marketing boards and representative associations are financially sound and seek to improve the transparency of their financial statements.

    Performance:

  • All 21 boards and 2 of the 3 associations complied with their regulatory responsibility to file audited financial statements based on their fiscal year and communicate those reports with producer-members. The audited financial statements were analyzed by the Commission to evaluate solvency, transparency, levels of risk, compliance with Commission guidelines and operating reserves. Although one association was late in submitting its financial statements to the Commission, the Commission's analysis indicated that the financial statements of all boards and representative associations under its supervision were financially sound in 2004/05.
  • To improve the transparency of board financial statements for producer-members, the Commission contacted all boards and associations requesting them to include a line item for fees paid for consulting, professional or legal fees.

Commitment:

  1. Conduct periodic reviews to evaluate the effectiveness of marketing plans and the use of authorities. The performance target was 10 boards and associations in 2004/05.

    Performance:

  • During the fiscal year, the Commission held full analytical reviews with 9 boards; one less than its performance target. The boards reviewed include:
    • Ontario Apple Growers
    • Ontario Broiler Hatching Egg and Chick Commission
    • Grape Growers of Ontario
    • Ontario Greenhouse Vegetable Growers
    • Dairy Farmers of Ontario
    • Ontario Pork Producers' Marketing Board
    • Ontario Potato Board
    • Ontario Sheep Marketing Agency
    • Ontario Tender Fruit Producers' Marketing Board
  • The Commission believes that review meetings are a cornerstone in the process of managing accountability. Accountability and responsibility are expected in return for the delegation of powers to producers in a marketing plan. Boards are analyzed to assess such things as: their financial accountability; relations and communications with producers; use of authorities; governance performance; stakeholder relations; and strategic direction.
  • The Commission also wants to invest its time with boards more strategically. For this reason, the Commission undertook a broad evaluation of all boards and associations under its supervision during strategic planning in December, 2004. As a consequence, the Commission delayed its 10th scheduled review meeting in the remainder of the fiscal period in 2005 while it considered its options.

Commitment:

  1. Marketing plans need the support of a significant number of producers and production.

    Performance:

  • The Commission reviewed and reaffirmed its policy concerning "Producer Expression of Opinion Votes" which it uses to gauge the level of producer support necessary for proposals dealing with establishing, retaining or significantly altering the marketing of regulated farm products. In 1999, the Commission made a significant change to its policy. To have the best possible information available from such votes, the Commission believed it was diligent to scrutinize both the number of producers supporting a proposal and the cumulative level of production they represent. This policy has worked well in each subsequent plebiscite and the Commission reaffirmed its appropriateness for future votes.
  • The policy was employed in two votes during 2004/05 involving greenhouse peppers and goat milk.
  • The principle was also the foundation of the Commission's work in 2004/05 to bring about a new marketing plan for apples in the province. The Ontario Apple Growers was formed in May 2004.
  • The Commission supported the efforts of the Grape Growers of Ontario as the board reviewed its governance model to determine if grower members could be better represented. The review resulted in both producers and production becoming considerations in the board's governance structure.

Commitment:

  1. Deliver training and education seminars to improve the effectiveness of boards of directors elected to lead marketing boards.

Performance:

  • Effective governance is a subject important to producers, elected boards of directors and the Commission alike. Having a common understanding of the value of training in the area of governance resulted in strong participation in the governance training offered for the collective benefit of all Ontario marketing boards and associations. Elected directors, chairs and senior staff from 14 boards and associations participated in a special training opportunity entitled, "Governance Best Practices." Commission staff also offered customized governance training workshops to individual boards who requested assistance in this area. The workshops were delivered to Dairy Farmers of Ontario, Ontario Soybean Growers and Ontario Sheep Marketing Agency.
  • The Commission targets newly elected board directors and staff for governance training. In 2004/05, newly elected directors and newly hired senior board staff participated in the Commission's "On-Demand Orientation Workshop," so-called because it is delivered to fit the needs and schedules of these clients. The training was delivered to 8 new general managers and new directors from 6 boards. An added benefit of the workshop is the early development of a helpful relationship and understanding between the boards and the Commission.
  • All of the Commission's training efforts are evaluated through feedback from participants. In addition, in 2004/05, the Commission's training initiatives were recognized and lauded by the President's Council, a body made up of Chairs and Presidents from marketing boards and farm organizations in Ontario.
  • In 2004/05, the Commission developed a pilot training project to address the pivotal governance roles played by the Chair, Vice-Chair and GM/CEO of any marketing board or association. The promotion of the pilot project took place in this fiscal year and it resulted in registration from 19 chairs, vice-chairs and GM/CEOs from 10 marketing boards. The workshop was consequently scheduled early in the next fiscal year.

Goal: A regulated marketing system that adapts to change.

Commitment:

  1. Continued efforts to keep a responsive and flexible regulatory system in place.

    Performance:

  • The Commission facilitated strategic discussions between the province's pork processors and the Ontario Pork Producers' Marketing Board which led to the resolution of an impasse regarding contracting protocols, as well as laying the groundwork for further collaboration to keep the system responsive to stakeholder needs.
  • After a full and thorough review of raw milk testing standards in the province, the Commission updated the current regulations. The goals were to increase system flexibility and simplification through technology enhancements while decreasing costs in the system by making better use of resources.
  • The Commission supported a request by the Ontario Wheat Producers' Marketing Board to transfer a board surplus to the creation of a new financial protection fund for wheat producers.
  • After meeting with a cross-section of representatives from the dairy and edible oil industries in December 2004, the Commission made a regulation under the Milk Act to prohibit filled milk and cream, and regulate the composition of dairy/edible oil spreads.

Commitment:

  1. Review Commission's policy on dual marketing.

    Performance:

  • The Commission analyzed the impact of dual marketing in the commodity markets where it existed in 2004/05. While pool marketing has steadily declined in the last half-decade in terms of volume of grain, beans and hogs sold through this means, the analysis also revealed a noteworthy number of producers who rely on the pool to market their commodity.

Commitment:

  1. Review Commission's policy on governance.

    Performance:

  • Early in the year, the Commission reviewed its governance policy which is based on the same principles used in its policy regarding producer expression of opinion votes. Members reaffirmed their policy's intention which speaks to the value of making both producer numbers and production a consideration in board governance.

Commitment:

  1. Examine the impact of integrated operations on boards' dynamics.

    Performance:

  • In 2004/05, Commission staff initiated an analysis of integrated operations operating in the regulated marketing environment in Ontario. For the purpose of this study, the operations, while vertically integrated, include processors who own primary production and primary producers who have invested in processing. The analysis was not completed in the fiscal year and the results of the study will be on the Commission agenda in 2005/06.

Commitment:

  1. Implementation of a board-effectiveness strategy.

    Performance:

  • In 2004/05, the Commission's strategic planning session focused on strategies for allocating Commission resources where they will be most beneficial in ensuring board effectiveness. The resulting strategy will be deployed in the next fiscal year 2005/06.
  • The Commission continues to deploy a risk assessment grid which analyzes numerous aspects of board activity from financial management to marketing to determine board effectiveness and to highlight issues the Commission needs to address with each board.
  • The Commission continues to encourage boards and associations to use Commission marketing analysts as a resource for advice on board effectiveness since they have a perspective that includes many years of experience and a broad perspective of what other boards have had to deal with.
  • Emphasis on training for elected directors of boards continued to be an important part of the Commission's commitment to this business objective in 2004/05. The Commission offered training tailored to the needs of organizations, and the various stages of experience of their elected directors and senior staff.

Commitment:

  1. Assist boards to undertake and complete strategic planning. Target set for having two boards develop or revamp their strategic plans.

    Performance:

  • Fifteen of the regulated boards and associations have current strategic plans as of March 2005. During the fiscal period beginning in April 2004, four boards developed strategic plans while another five revisited their plans and fine tuned them. The Commission's target was satisfied by this commitment to strategic planning by the boards and associations under its supervision.

Strategic Focus #2: Foster Enhanced Stakeholder Relations to Achieve Industry Solutions

Goal: Cultivate industry-focused leadership

Commitment:

  1. Develop an annual education seminar that brings diverse stakeholders together to look at key issues from an industry perspective. At least 50 percent of marketing boards and associations should attend.

    Performance:

  • In December 2004, the Commission worked with industry stakeholders to develop and deliver a seminar for marketing boards and their buyer/processor partners entitled, "Diet & Health: Marketing Opportunities and Minefields for Ontario's Agriculture and Food Sector." The seminar topic was developed for its broad appeal and importance as a trend impacting the food sector. The seminar was attended by eighty people representing fourteen marketing boards and associations and four processing industry associations, so the target of fifty percent participation was exceeded. The qualitative measure of value to our stakeholders was assessed in feedback surveys.

Commitment:

  1. Develop and deliver a monthly electronic newsletter to enable the Commission to reach marketing board and association committee people.

    Performance:

  • The Commission completed a survey of its newsletter circulation list and in the process, 20 percent of clients migrated to the electronic newsletter and discontinued the mail-circulated version.
  • The Commission's newsletter is circulated to 1000 marketing board directors, staff, councillors and buyer/processor stakeholders in the regulated marketing system. Half of the circulation list is now electronic.

Goal: Ensure the regulated system meets the needs of producers and the marketplace.

Commitment:

  1. Play a lead role to foster dialogue and reduce stakeholder conflicts in targeted industries.

    Performance:

  • When issues created stakeholder conflicts in 2004/05, the Commission immediately intervened to restore and facilitate constructive dialogue regarding industry challenges. The Commission was active throughout the year in several commodities related to this commitment and finds its unbiased position being sought after by more sectors of the regulated, agricultural economy.
  • During the fiscal year 2004/05, the Commission stressed the importance of improving the relationship between the province's poultry producers and processors. The Commission was involved in the process which led to a producer-processor committee to strengthen their relationship and build for the future.
  • In 2004/05, the Commission continued to invite processor associations to meet with the Commission to discuss their views, objectives and issues. With this information, the Commission is in a more informed position from which to interact with marketing boards and their buyer/processors. The Commission met with groups such as the Turkey Committee of the Ontario Poultry Processors' Association, the Ontario Dairy Council and the Wine Council of Ontario.

Goal: Ensure the regulated system maintains a fair and balanced approach.

Commitment:

  1. Ensure all marketing boards operate with consideration to other stakeholders in the industry.

    Performance:

  • To foster an improved understanding of interest-based bargaining skills, the Commission worked with the Ontario Processing Vegetable Growers to develop a training workshop which was offered to all marketing boards and associations. Six boards registered 18 participants in the January workshop.
  • In 2004/05, the Commission continued to stress the importance of industry dialogue and stakeholder involvement when meeting with marketing boards and associations.

Commitment:

  1. Seventy-five percent of boards appearing for review meetings with the Commission will provide demonstrable examples of industry-based solutions.

    Performance:

  • The Commission held in-depth review meetings with nine marketing boards during the 2004/05 fiscal year. Two of the boards exhibited positive, on-going, working relations with their buyer/processors. Of the remaining seven boards, five or 71% were working through industry issues in a manner indicative of industry-based solutions. In the broiler hatching egg and chick sector a new, more flexible cost-of-production formula was being worked out with consideration for both sellers and buyers. Dairy Farmers of Ontario worked with dairies and the Commission to develop a strategy to develop the market for Omega-3 enhanced milk beverages. The Ontario Greenhouse Vegetable Growers encouraged the formation of the Ontario Greenhouse Marketers' Association so organized dialogue with brokers could occur. The Ontario Apple Growers set up industry advisory committees with buyers soon after the new marketing board was formed so they would have a forum for industry-based strategies. Ontario Pork worked with their buyers to develop a strategy for future contracting protocols.

Commitment:

  1. Three boards make effective use of an Industry Advisory Committee.

    Performance:

  • The pork industry made a concerted effort in 2004/05 to ensure that stakeholders have a forum for regular, strategic planning and problem solving.
  • The grape and wine industry made initial steps in this direction during the early part of 2004/05 but was sidetracked by a legal issue. The process was getting back on track as the fiscal year was winding down. This committee was co-chaired by members of the Commission.
  • The province's apple industry is making very effective use of its two committees which address juice apples and fresh apples. These committees are chaired by a member of the Commission.

Strategic Focus #3: Enhance Ontario's Interests on Regulated Marketing, Nationally and Globally

Goal: Active support of supply-managed boards through participatory involvement in national marketing systems.

Commitment:

  1. New egg, broiler hatching egg, and turkey national agreements in place by the end of the fiscal period.

Performance:

  • The Commission categorizes this initiative as a long term goal. The Commission recognizes that it may take considerable effort to bring all the parties to an agreement. Each of the three commodities have draft revisions in various stages but none are close to ratifying a new national agreement that will receive the unanimous support necessary from each of the provinces.
  • In 2004/05, the Commission played a key role in initiating a series of discussions with Federal-Provincial counterparts on the challenges facing feather agencies in updating their national agreements.

Commitment:

  1. Work with Dairy Farmers of Ontario and the Ontario Dairy Council at the national level to address Ontario positions and concerns with respect to managing milk supply.

    Performance:

  • The Commission was an active participant in national discussions aimed at managing the milk supply in Canada. The year started with a visioning session involving all P5 member provinces. By mid-2004, the issue of a quota exchange between Ontario and Nova Scotia was before a dispute panel. After a judgement was rendered, the two provinces decided to resume discussions.

Financial Performance

The Commission's resource requirements are incorporated under the ministry's business plan. A detailed description of these resources is presented below.

Operating Expenditures

 
Budget
2004/05
Actual
2004/05
Salaries & Benefits
$1,164, 100
$1,045,110
ODOE
$405,200
$381,909
Recoveries
($30,000)
($8,100)

TOTAL

$1,539,300
$1,418,919

 

Commission Members

DAVE HOPE
Chair

Dave Hope
Ontario Ministry of Agriculture and Food
Executive Staff Member

DEBORAH WHALE
Vice-Chair

Deborah Whale

Ms. Whale owns and operates Clovermead Farms. The dairy, veal and beef operation is located in Wellington County. Deborah is the current Chair of the Poultry Industry Council and a board member of Farm Credit Canada, as well as a past director with the Wellington Federation of Agriculture. She has served the agri-food sector in many other capacities including the Minister's Advisory Committee for the Canadian Food Inspection Agency, the Agriculture Research Institute of Ontario and the Midwestern Ontario Co-operative Board.

NORMAN BEAL

Norman Beal


Mr. Beal owns and operates Peninsula Ridge Estate Winery in Beamsville. He joined the Commission in June 2002. In addition to operating the vineyard and winery, Norman is actively involved with the Wine Council of Ontario and the Canadian Vintners Association. Norman's background also includes extensive experience as an international commodity trader specializing in petroleum.

 FRED LEWIS

Fred Lewis
Mr. Lewis owns and operates a cash crop and chicken operation in Denfield. Mr. Lewis served on the Board of Directors of Chicken Farmers of Ontario from 1991-1998. He was a founding director of the Ontario Corn Producers' Association. He has also held municipal office as Reeve of London Township & Warden of Middlesex County.

CAROLYN FUERTH

Carolyn Fuerth

Ms. Fuerth is a partner in Ewe Dell Family Farms in Essex county. The business includes a 500-head breeding flock of sheep together with a provincially-inspected abattoir and a cash crop acreage. Carolyn is an executive member of Ontario AgriFood Education Inc. and a past director with the Ontario Federation of Agriculture. Carolyn has been involved in leadership and organizational development for many years. Carolyn's background also includes dairy farming.

BOB AUMELL

Robert Aumell joins the Commission after 33 years with Farm Credit Canada (FCC) which he retired from in 1997. During his years with FCC, Mr. Aumell specialized in providing financial services to Canadian producers.

In 1997, Mr. Aumell launched Aumell Agri-Consulting which focuses on change man-agement in the agriculture sector. The business is based in Guelph.

TOM RICHARDSON

Thomas Richardson of Ottawa, retired from Agriculture and Agri-Food Canada in 2004. He most recently held the position of Acting Assistant Deputy Minister for Pol-icy. While in that position, Mr. Richardson worked on policy development for many aspects of agriculture including safety nets and farm income. Prior to joining Agricul-ture and Agri-Food Canada, he worked for the Treasury Board Secretariat from 1978 to 1987.

Mr. Richardson holds a PhD from Brown University, Providence R.I. and a M.Sc. from the University of Toronto.

ARVA MACHAN

Arva Machan

Acting General Manager, Ontario Farm Products Marketing Commission, Ontario Ministry of Agriculture and Food

GLORIA MARCO BORYS

Gloria Marco Borys

Secretary, Ontario Farm Products Marketing Commission,
Ontario Ministry of Agriculture and Food

For more information:
E-mail: ontariofarm.productsmarketing.omafra@ontario.ca
Author: Graham Howe, Marketing Analyst, OFPMC
Creation Date: 24 June 2005
Last Reviewed: 24 June 2005