CA: QIP Hearing Shows Strong Feelings on Both Sides of the Quota Issue

Joel Hastings

A hearing held by the California Department of Food and Agriculture (CDFA) lasted two days on June 9 and 10 with well over 100 dairy producers testifying to administrative law judge Timothy Aspinall. Attorneys for the Stop QIP, Save QIP and the United Dairy Families of California opened the proceedings with their presentations advocating their respective positions. The sessions were conducted virtually using Microsoft Teams software, with only the judge, a court reporter and two attorneys from the Attorney General’s office representing CDFA present physically. Throughout the two days, some 190 participants listened in at various times via computer or phone.



As has been reported, the hearing was held because the Stop QIP group had submitted a petition to CDFA Secretary Karen Ross with signatures from 28% of California’s dairymen as of January 2020 representing 33% market milk produced in the state.

The purpose of the hearing was very specific, as stated in the meeting notice: “The Department seeks stakeholder and public comment on whether a producer referendum should be conducted pursuant to Chapter 3.5” of the law establishing the revised Quota Implementation Program put into place at the time the Federal Milk Marketing Order was adopted in 2017.

The issue centers on Chapter 3.5 because holding a vote under that provision would only require a simple 51% majority of producers to vote QIP up or down. The Save QIP producers and the United Dairy Families group believe that the law and past practice establishing the quota program require a “supermajority” vote, essentially two thirds of those voting as described in another section of the law, 3.0. These two groups consider the 3.5 simple majority to be a technicality never intended to be used that would not allow a fair representation of producer wishes.



During this hearing, sincere and heartfelt testimony on both sides of the quota issue was presented. Quota holders say they count on the higher milk price paid to milk covered by quota, a price that allows them to stay in business in many cases. They also say that quota is an important asset on their balance sheets affecting everything from banking relationships to retirement planning. A sudden termination of quota with no compensation would be both financially devastating and completely unfair.

Those testifying against the continuation of QIP point out that they must pay about 36 cents per cwt of all Grade A milk they produce, with that money going to administer the program and pay the quota holders. They say this amount deducted from their milk checks make it difficult to run their businesses and is a barrier to entry for young dairymen. They say QIP reflects a program that is no longer relevant, since originally it was calculated on fluid sales and they simply want a chance to vote on the program.

By 3 p.m. on the 8th, there were no more individuals who wanted to testify. The judge gave the attorneys for the three groups until June 26 to submit their final arguments. There will be a public record available of all the testimony both written and spoken. In due course, with no date announced, the judge will be making his recommendation to the Secretary on whether a producer referendum should be held under the “3.5 section” requiring only a simple majority.

In the meantime, the lawsuit filed by Stop QIP against CDFA challenging the QIP as being improperly created will have its first hearing on July 31.

Also, on June 8, the United Dairy Families announced it had filed a petition with the Secretary asking that the program they developed, a five-year sunset of quota, be submitted to producers for a referendum under the “supermajority” 3.0 provision of the law. The full release is here.

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