The Ontario Farm Products Marketing Commission and its Role in Ontario's Regulated Marketing System

Table of Contents

Overview of the Regulated Marketing System

Regulatory authority for the regulated marketing system in Ontario is derived from either the Farm Products Marketing Act (FPMA) or the Milk Act (MA). This legislation outlines the powers and responsibilities of the participants in the regulated marketing system. The current legislation was originally enacted to enable producers of a commodity to collectively market their product in an orderly manner and balance the power between many small individual sellers and relatively few larger buyers.

Generally, the purpose of the two acts is to

  • stimulate, increase and improve the production or marketing of identified farm products;
  • provide for the control and regulation of the producing and/or marketing within Ontario of identified farm products; and
  • under the MA, control the quality of dairy products.

Under the acts, there are marketing boards established and representative associations designated for a wide range of agricultural products.

Responsibilities of the Major Participants

The major participants in the province's regulated marketing system are:

  1. Provincial Cabinet and the Lieutenant Governor in Council (LGIC);
  2. Minister of Agriculture and Food
  3. Ontario Farm Products Marketing Commission (Commission);
  4. Marketing boards and representative associations;
  5. Buyers of regulated agricultural commodities, and
  6. Agriculture, Food and Rural Affairs Appeal Tribunal.

The provincial Cabinet, through the Lieutenant Governor in Council (LGIC), is responsible for creating or dissolving a marketing board and for defining the regulated product. It also establishes each board's electoral and governance structures. For a representative association, the Cabinet defines the farm product and sets the licence fee paid by producers.

The Minister of Agriculture and Food is directly accountable to Cabinet and the Legislature for all laws associated with agriculture and therefore, is ultimately responsible for the regulated marketing system in Ontario.

Ontario Farm Products Marketing Commission

The Commission is the agency of the Ontario Ministry of Agriculture and Food that is accountable for the conduct and impact of Ontario's regulated marketing system. Its members are private citizens appointed by the Lieutenant Governor in Council.

While policy development and supervision related to the enabling legislation is a cornerstone of the Commission's agency mandate, the Commission also provides strategic leadership, advice and facilitation to industry producers, processors and other value chain participants. Working with the industry on regulatory changes to advance the sector is a critical component of the policy development process. Through its actions, it ensures that individual commodity systems operate in an effective and responsible manner. This is done with due regard to the impact of Commission decisions on the agri-food sector and consumers, while also maintaining the public policy goals of the legislation.

The FPMA and the MA give very broad ranging powers and authorities to the Commission. Some of these powers and authorities may be exercised by the Commission directly or delegated by the Commission to a marketing board. An example would include licensing of producers. There are also powers and authorities that the Commission cannot directly exercise but can delegate to a marketing board. An example would be the power to set/negotiate prices or establish quota. Finally, there are some powers and authorities that the Commission has and cannot delegate to a marketing board. For example, the Commission must order negotiated agreements and arbitrators' awards into force to make them binding on both producers and buyers of the commodity.

Producers of a commodity or group of commodities request the specific authorities from the Commission that they desire in a marketing system. After considering why the authorities are needed, how they will be utilized and what the potential impact may be on other sector participants, the Commission determines which authorities will be included in the marketing regulation.

The Commission has the authority to limit or revoke any of the powers or authorities given to marketing boards.

Marketing Boards

Marketing Boards are bodies corporate under either the FPMA or the MA, representing producers of one or more specific agricultural commodities. The boards of directors are normally elected by producers. Authorities are delegated to each board by the Commission to regulate the production and/or marketing of those commodities. This includes the authority to set a mandatory licence fee for producers, with the fees used to finance the activities of the board.

Marketing authorities vary widely among boards in the degree to which they control how producers sell their commodities and how companies who purchase raw agricultural commodities (i.e. food processors, dealers) source and purchase their requirements. Although most boards do not directly market their commodities, each has been delegated authorities related to the production and/or marketing of relevant farm product(s).

Representative Associations

Representative Associations, commonly referred to as Section 12 organizations, are incorporated under the Agricultural and Horticultural Organizations Act or the Corporations Act. (The Corporations Act will be replaced by the Not-for-Profit Corporations Act, 2010, when it is proclaimed at some point in the future). Each Section 12 organization is designated as a representative association under the FPMA in a Cabinet regulation. Unlike marketing boards, the licence fees for each representative association are established in its regulation. Section 12 organizations are limited to activities such as advertising, education, and research.

Buyers of Regulated Commodities

Buyers of regulated commodities must comply with FPMA and MA and underlying regulations. For example, buyers may be required to supply information regarding the marketing of the farm product, be licensed as a processor, negotiate minimum prices and terms and conditions of sale with the marketing board, and pay producers the minimum price that has been set or negotiated by the marketing board, Buyers may also be asked to serve on industry advisory committees to resolve short and long term issues regarding regulated marketing systems.

The Commission encourages boards and the affected industry participants to find solutions to issues. The Commission often participates in these discussions, and where there is an impasse, may choose to provide direction.

The Agriculture, Food and Rural Affairs Appeal Tribunal (Tribunal)

The Tribunal is an agency of the Ministry of Agriculture and Food, empowered by the Legislature to make decisions that are legally binding on the parties involved. An aggrieved person can appeal any order, direction, decision, policy or regulation made by a marketing board or any order, direction, or decision of a director appointed under the FPMA or MA. With respect a marketing board decision, the person must first ask the marketing board for a hearing to try to resolve the issue. The Tribunal can also review a decision of the Commission with respect to a specific person. Commission decisions with general application cannot be appealed to the Tribunal, but the Commission can be asked to reconsider its decision.

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