NEWFOUNDLAND REGULATION 69/98

Short title

1. These regulations may be cited as the Milk Regulations, 1998.

Definitions

2. In these regulations

(a) "approved applicant" means a person whose application to DFNL for the allocation of a milk quota was approved in principle on or before September 13, 1988;

(b) "catastrophe" means a situation which affects a dairy farm unit of a registered producer and over which the registered producer has little or no control and which affects his or her production and includes,

(i) severe illness or death of the registered producer,

(ii) sudden death or loss of a significant portion of the registered producer's producing herd of cows,

(iii) destruction of the registered producer's production facilities,

(iv) severe outbreaks of a disease not caused by the negligence of the registered producer which affects a significant part of the registered producer's producing herd of cows, and

(v) a disease which requires slaughter by health authorities of a significant part of the registered producer's producing herd of cows;

(c) "new entrant reserve" means the bank of quota established by the DFNL to be held for approved applicants and new entrants;

(d) "production" means the quantity in litres of milk per day produced by a registered producer and delivered to a registered processor; and

(e) "quarter" means a fiscal quarter-year of the DFNL as determined by the DFNL.

PART I
LICENSING

Monthly report required

3. A processor shall report on a monthly basis to the DFNL the amount of milk which was purchased and marketed in the previous month.

Licence refusal, suspension or revocation

4. The DFNL may refuse to issue or renew a licence, may suspend or revoke a licence where the applicant or licensee contravenes a condition of the licence, or an order or regulation of the DFNL.

Licence return required

5. A licensee who ceases to be a producer or processor shall immediately notify the DFNL of that fact and his or her licence shall be immediately cancelled by the DFNL.

Licences non-transferable

6. Licences issued by the DFNL shall not be transferable.

Distributors

7. (1) A distributor shall be licensed by the DFNL.

(2) A processor shall provide to the DFNL a list of his or her distributors, and those distributors shall be considered to be registered distributors for the purposes of these regulations.

PART II
QUOTAS

Provincial quota

8. The DFNL shall, prior to January 1 of each year set the provincial milk quota for the following year.

Milk quota

9. The DFNL shall set out the daily quota allocated to a registered producer in that producer's licence.

Quota increase

10. (1) A registered producer seeking a quota increase in any year shall apply to DFNL prior to September 1 of the previous year on the form prescribed by the DFNL.

(2) A quota available for distribution by the DFNL shall be distributed on the following basis:

(a) firstly, 80% to registered producers applying under subsection (1) on a proportional basis; and

(b) then, 20% to approved applicants and new entrants.

(3) If the 20% referred to in paragraph (2)(b) is less than 500 litres per day, that percentage shall be added to the new entrant reserve.

(4) If the new entrant reserve is

(a) less than 500 litres per day, the percentage referred to in paragraph (2)(b) shall be distributed according to paragraph (2)(a) and the calculated level of the new entrant reserve shall remain unchanged; and

(b) greater than or equal to 500 litres per day, the reserve shall be distributed according to paragraph (2)(b) and the amount distributed under paragraph (2)(a) shall be reduced by the amount of new entrant reserve as distributed.

(5) Notwithstanding subsection (2), a quota may be available for distribution due to unusual or special circumstances as determined by the DFNL.

Quota decrease

11. (1) A decrease in quota shall be applied to all registered producers on a proportional basis.

(2) Notwithstanding subsection (1), a registered producer shall not have his or her quota reduced to less than 500 litres a day.

Minimum quota

12. The minimum quota under which an approved applicant or new entrant may be brought in under the Milk Scheme, 1998 is 500 litres per day.

Maintenance of production

13. (1) If a registered producer fails to produce 90% of his or her quota on an annual basis for two consecutive calendar years, that registered producer's quota in the following year shall be calculated at his or her average production over the two years divided by 0.90.

(2) In calculating a registered producer's production under subsection (1), the DFNL shall exclude any production which exceeded 110% of the quarterly equivalent of the registered producer's quota.

(3) For new entrants and approved applicants, subsection (1) shall not apply until the beginning of their second year of operation.

(4) Notwithstanding subsection (1), a registered producer's quota shall not be reduced below 500 litres a day.

(5) The DFNL shall notify by registered mail all registered producers who fail to produce 90% of their quota on an annual basis in a year.

(6) A registered producer who is in violation of subsection (1) or subsection (3) and who intends to apply for a waiver under subsection (7) shall inform the DFNL of that fact in writing before September 1 in a year, outlining the particulars of the reasons and circumstances of his or her request.

(7) Notwithstanding another provision of these regulations, the application of this section may be waived by the DFNL in whole or in part or subject to the conditions that the DFNL may determine if

(a) the registered producer satisfies the DFNL that the adverse performance for a calendar year occurred as a result of a catastrophe; or

(b) the waiver is justified and reasonable

(i) on compassionate grounds, or

(ii) for another just and equitable ground.

Lease, transfer or sale of quota increase

14. Where an increase in quota is granted by the DFNL, that increase shall not be sold, leased or transferred for a period of one year from the grant of the increase.

Quota lease

15. A quota may be leased with the prior written approval of the DFNL.

New entrants

16. A person may apply to the DFNL for an allocation of quota in the manner prescribed by the DFNL.

Quota restrictions

17. (1) Quotas shall not be sold, transferred, leased, assigned or otherwise dealt with by registered producers without the prior written approval of the DFNL.

(2) The DFNL may transfer that portion of a quota which has been fully utilized by the holder of it, or a portion of that quota upon receipt by the DFNL of an application in writing, in a form prescribed by the DFNL including evidence of the written consent of a registered secured creditor of the vendor to the proposed transfer in advance of that transfer.

(3) In the event of a transfer of all or a portion of a registered producer's quota under this section, the registered producer holding the quota and the proposed transferee shall satisfy the DFNL that the transfer shall result in the existence or continuation of a separate dairy, including

(a) land;

(b) building;

(d) a herd having a minimum milk quota of 500 litres per day.

(4) If the proposed transfer will result in a quota of less than 500 litres per day, the DFNL may approve the transfer of the quota or a portion of it subject to the conditions that it may impose, if that proposed transfer would be in the best interests of

(a) the applicant;

(b) the proposed transferee;

(d) the industry.

Fees

18. (1) The DFNL may prescribe fees for costs incurred by it in connection with the consideration of an application for the transfer of quota.

(2) Fees required under subsection (1) shall be paid prior to the transfer being approved.

(3) Transfers of milk quotas shall not be approved until all debts, penalties, fees, charges, levies and other amounts due to the DFNL by the transferor or by the transferee have been paid in full.

Excess production

19. (1) If a registered producer produces during the fiscal quarter-years of the DFNL milk in an amount in excess of 110% of his or her fluid milk quota as calculated by the DFNL for that quarter, the DFNL shall impose upon that registered producer by notice in writing a penalty in an amount equal to 2.5 cents for each litre on that excess production over 110% which shall be deducted by the registered processor.

(2) The calculations made by the DFNL shall be, in the absence of evidence to the contrary, proof of determinations made by it under this regulation.

Deduction of penalty

20. (1) Registered processors shall, immediately on receipt of a demand by notice in writing from the DFNL, deduct the amounts of penalties, fees, charges and levies from amounts otherwise payable, or after receipt of the demand becoming payable, by the registered processor to a registered producer upon whom a penalty, fee, charge or levy has been imposed and remit it immediately to the DFNL upon making those deductions.

(2) The receipt by a registered processor of a demand from the DFNL under subsection (1) shall be sufficient and continuing authority to the registered processor to make deductions and to remit the payments as set out in that subsection.

(3) If the amount of the penalty owing under subsection (1) is less than $300, the DFNL may require immediate payment of the penalty.

(4) If the amount of the penalty owing under subsection (1) is greater than $300, the DFNL may require immediate payment of $300, and further payment to satisfy the penalty as the DFNL may determine.

Authority for deduction

21. The receipt by a registered processor of a demand from the DFNL under section 20 shall be sufficient and continuing authority to the registered processor to make a deduction from amounts otherwise payable by a registered processor to a registered producer and to remit the amount to the DFNL as set out in section 20.

PART III
PRICE OF MILK

Minimum price for milk

22. The minimum price at which milk, 3.6 kilograms butterfat content, shall be bought, sold or offered for sale F.O.B. registered processors' premises in the province shall be $0.8098 per litre and for every one-tenth kilogram in excess of that butterfat content, the minimum price of milk shall be increased by a premium of $0.22 per one-tenth kilogram butterfat content per litre.

Exportation of milk

23. Milk may only be exported by a registered processor with the approval of the DFNL.

Export price

24. (1) With respect to an export shipment of milk from the province, the DFNL shall calculate the net selling price of the milk by deducting from the gross selling price

(a) the costs of transportation; and

(b) any other charges and levies incurred and imposed in connection to the export.

(2) A processor shall, at the direction of the DFNL, deduct the difference between net selling price calculated in subsection (1) from the price already paid to the registered producer for that exported milk.

Allocation

25. (1) The monetary deficiency under section 24 shall be allocated by the DFNL proportionally

(a) firstly among those registered producers who exceeded their fluid milk quotas by more than 110% for the pay period in which the export shipment and sale occurred;

(b) secondly to those registered producers who exceeded their quotas between 100% and 110% in the pay period in which the export shipment and sale occurred; and

PART IV
SERVICE CHARGE

Service charge

26. A service charge shall be imposed as follows:

(a) $0.024 per litre on all milk originally produced by registered producers, payable by the registered producers, for use by the DFNL as follows:

(i) for the DFNL administration,

(ii) for the Newfoundland and Labrador School Milk Foundation, and

(iii) for Newfoundland and Labrador Federation of Agriculture and the DFNL promotional activities; and

(b) $0.01 per litre on all milk originally produced on dairy farms situated outside the province and marketed under the Milk Scheme, 1998, payable by the owner at the time of its entry in the province.

Collection of service charge

27. All service charges shall be collected by registered processors and remitted to the DFNL no later than the fifteenth day of the month following all deliveries and sales of milk made to registered processors in the preceding month.

PART V
IMPORTATION OF MILK

Licence required

28. (1) A person shall not bring any milk into the province unless he or she holds a valid licence for the importation of milk issued by the DFNL.

(2) Unless an exemption is made by the DFNL, separate permit numbers shall be obtained for each shipment of milk outside the province.

Pre-packaged milk

29. (1) A person shall not bring any pre-packaged milk into the province.

(2) Subsection (1) does not apply to ultra high temperature (UHT) milk.

(3) Notwithstanding subsection (1), the DFNL may issue to a processor for a limited period of time

(a) a permit to import; and

(b) a licence to process, distribute and market within the province milk in any form for the purpose of test marketing milk for sale to consumers or institutions in the province.

Availability of milk

30. A processor shall not be issued a permit to bring bulk milk into the province unless he or she can provide satisfactory proof to the DFNL that the milk is not available from a producer or processor within the province.

UHT milk

31. A person shall not process, package, distribute or offer for sale ultra high temperature (UHT) milk, except with the approval of the DFNL.

PART VI
GENERAL

School milk

32. All milk marketed in the province under the school milk program administered by the Newfoundland and Labrador School Milk Foundation Inc. shall be cow's fluid milk.

PART VII
REPEAL

Repeal

33. The following regulations are repealed:

(a) Consolidated Newfoundland Milk Marketing Board Orders, Consolidated Newfoundland Regulation 1187/96;

(b) Fluid Milk Penalty Order, Consolidated Newfoundland Regulation 1188/96;

(d) Importation of Milk Regulations, Consolidated Newfoundland Regulation 1176/96;

(e) Newfoundland Milk Marketing Board Exportation of Milk Regulations, Consolidated Newfoundland Regulation 1016/96;

(f) Newfoundland Milk Marketing Board Licensing Regulations, Consolidated Newfoundland Regulation 1177/96;

(g) Newfoundland Milk Marketing Board Regulations, Consolidated Newfoundland Regulations 1190/96; and

(h) Transportation of Milk Regulations, Consolidated Newfoundland Regulation 1178/96.