News

Quota Assessment Evaluation

Date: April 12, 2017

April 13, 2017

Notice to BC Chicken Industry Stakeholders          

Quota Assessment Evaluation

The BC Chicken Marketing Board (BCCMB) is evaluating quota assessments as they pertain to chicken quota in BC.  This review is part of the BC Farm Industry Review Board’s Quota Assessment Tools Evaluation, which requires all five supply managed commodity boards in BC to determine what, if any, changes to transfer assessment structures and/or industry entry policies are needed to maintain sound marketing policy, taking into account both industry and public interest.

Background

In 2005, the BC Farm Industry Review Board (BCFIRB) provided principles and direction to B.C.’ s five supply managed agriculture commodity marketing boards to ensure the existence of programs to adequately support specialty markets and new farmers.

Relevant Policies

The four key policies from the 2005 Review that apply to this Evaluation Project include:

  1. Quota is intended to be produced.
  2. Quota is transferable.
  3. Producers are actively engaged and committed to the industry.
  4. Quota is available to commodity boards to support policy objectives, including development of specialty markets and providing for new entrants in the supply managed system.

Objectives

BCCMB’s objectives for this evaluation are:

  1. To evaluate the efficacy of BCCMB’s New Entrant Grower program, as well as other new entry in the industry.
  2. To identify and evaluate the impacts of transfer assessments on incentive quota, both based on the current scenario and in the case of a pro-rata mainstream quota increase to all BC chicken growers.
  3. Identify possible alternatives to declining assessments that encourage active engagement and commitment to the industry while deterring the selling of incentive quota for windfall gains.

Participation

During the first stage of the consultation process, the BC Chicken Marketing Board will hold regional face-face listening sessions with industry stakeholders (growers, processors, vendors and other industry participants) in conjunction with other spring producer meetings across BC. These sessions will take place from April 18 to May 31, 2017. The discussion will be focused on questions related to industry entry, the impact of transfer assessment policies on entry and quota movement and a traditional outlook on succession and quota assessment.

Entry to Industry

  1. Is the current transfer assessment providing adequate opportunities for new entrants?
  2. Is quota available to those who wish to expand their business or enter the industry by purchasing quota?

Transfer assessment policies on market entry and quota movement.

  1. Do transfer assessments impact new entrants, specialty and mainstream producers differently, and if so, how?
  2. Have transfer assessments been successful in keeping people active and engaged in the industry, deterring selling of quota for windfall gains vs. producing it?
  3. Would the answers to the above questions be different if BCCMB administered a pro-rata quota increase of mainstream quota, which would be subject to declining transfer assessments and LIFO?

Traditional outlook on succession and quota assessment

  1. Are whole farm transfers still important for succession or industry health?
  2. Are non-family succession structures important for industry success going forward?
  3. Do current transfer assessments enable producers to sell/transfer their farms sufficiently intact, remaining financially viable
  4. Other than 10/10/10 and LIFO, are there other preferred alternatives to transfer assessments that would encourage active engagement and commitment to the industry while deterring the selling of quota for windfall gains? Describe.

Other

  1. Do you have any other comments in regards to quota assessments and/or industry entry?

In addition to in-person meetings, all broiler industry stakeholders and members of the public are invited to review the questions below and provide input via mail, email or online form.

Mail:   Attn: Quota Transfer Assessment Consultations
BC Chicken Marketing Board
101 – 32450 Simon Avenue
Abbotsford BC V2T 4J2

Email:   consult@bcchicken.ca

Online Form:  Simply submit your comments and/or feedback via the online form below under”Participation Questions.”

Frequently Asked Questions

What are “transfer assessments”?

As per BC FIRB’s 2005 Specialty Review, transfer assessments are the surrendering back some of the seller’s quota when quota is transferred from one grower to another. Boards can redistribute the assessed quota in a manner to respond to specialty markets and provide opportunities for new growers. In 2005, four of the five marketing boards proposed that the assessment would be levied on the transferor (the farmer selling the quota) and reduce the amount of the quota available for transfer by 5%.

How does the BCCMB use transfer assessments?

For traditional mainstream quota, BCCMB uses a “deemed transfer assessment” whereby the amount of the assessment would be calculated as 5% of the total transfers in a period and the amount from this calculation would be deducted from the provincial allocation prior to distribution among quota holders. This approach has no exemptions for family members and/or corporate restructuring.

For incentive quota issued after 2005, BCCMB uses a “10-10-10” declining assessment, so that the last incentive quota issued is the first quota to be transferred.  (“LIFO”).

What is ‘incentive quota’?

Incentive quota is quota issued by the board at no cost, such as new entrant grower quota or a pro rata increase.

What is “10-10-10”?

In the 2005 Specialty Review, BC FIRB directed the establishment of a declining transfer assessment for the transfer of incentive quotas. This schedule requires an automatic retraction of 100% in the first year after issuance. Subsequently, the amount retracted declines by 10% per annum until it reaches a minimum assessment of 10% in year 10.

What is “LIFO”?

“LIFO” is an acronym for “Last In, First Out.” In its 2005 Specialty Review, BC FIRB directed that a condition of “LIFO” be implemented on the transfer of any incentive quotas. In other words, the last quota issued by the board is the first quota to be transferred.

Additional Resources

BC FIRB’s 2005 Specialty Review Report.

BC FIRB Expectations for 2017 Quota Assessment Tools Evaluation

2017 Jan 16 Proposed Terms of Reference for commodity boards_corrected_d…


Participation Questions – Quota Assessment

We would appreciate your responses to these questions to help guide our quota assessment evaluation.
You do not need to answer all of them.





Fraser Valley/Lower MainlandOkanaganVancouver IslandOther


ProducerPermit HolderProcessorConsumerOther

Questions for Industry Discussuion

Entry to Industry



Transfer assessment policies on market entry, quota movement and price




Traditional outlook on succession and quota assessment





Other