Governance Review Meetings with Ontario and Quebec Organizations

• There are no good governance models in Canada, with most commodity organizations originating in the 60’s/70’s when the number sold with rules was the focus.
• The future requires differentiation in the marketplace with different rules and different people. This may require giving up power with more of a supply chain versus commodity focus. The vegetable board in Ontario is maybe an example where they are mainly moving / responding to customer knowledge, i.e. a discount on processor supplied seed based on increased yields where the processor is viewed as a customer who has to compete with imported California products.
• Ag boards cannot keep their noses out of management and have a hard time being strategic versus operational.
• OFA is showing some leadership for reform.
• We need to make organizations take responsibility for and make decisions. For example, we want environmental farm plans, but there is no requirement for performance. “How do you control the idiots?” – provide /have rules to hold someone responsible if they are given the right to self-regulate or not.
• Maybe every 5 years organizations should be required to prove value to the members, perhaps a better value equation than having voluntary levies/fees.
• The Canadian Pork Council is currently going through a governance review They are looking for differences with competitors versus similarities as well as servicing customers in efforts towards improving market performance/results.
• If you had a sunset clause process to prove value, members should decide the fate of the organization, not government. It would best be led by a third party as it needs to be neutral and done carefully. A dilemma is what will replace it. Who should pay – the government /public as the decision to for or not required their approval and conditions.
• If there is any place that a strategic vision of agriculture can emerge and grow, it is in Alberta! Alberta can do it!!
• Leadership development is critical and likely coaching is needed for organization boards, particularly on being strategic versus operational.
• Interested in future involvement in Alberta’s changes, perhaps in the implementation part.

• Currently part of efforts with soybeans and wheat to create a new organization under the Commission/Marketing Board legislation. This was started as a bottom up process.
• Changes are moving slow due to the need to develop the specifics in meeting legal/legislative requirements. It was noted that government has been a bit of a roadblock in the change process, especially the legislative component.
• One difficulty for OCPA,, and at the same time an opportunity for new “rules/powers”, is the fact that they are currently under separate legislation from soybeans and wheat. One advantage is the ability to change levies via regulation versus legislative amendment.
• Recognition that the staff members of the three organizations will be merged and he may not be selected the new CEO. One helpful item at this time is that all three currently have offices in the same building/Agro Centre in Guelph (across the street from OMAF).
• Producer members in the three organizations were given four options for collaboration/integration for the future – one depicted as a new organization with a merged functional focus (versus commodity) was chosen.
• Had worked with OFA a bit but more recently with the emerging OFA changes and new leadership.
• See www.ontariocorn.org

• Actively involved in research and advocacy for a new look/approach. He recently presented to the Ontario President’s Council “A New Agriculture – New Roles for Farm Organizations” . See www.iafpi.ca. He sees connection as the key with a new way of looking at farm business management: individual strategies and collective strategies linked to internal management, network management and industry associations.
• In order to be competitive, there is a need to represent/deal with the entire industry not just the commodity components
• The management for the future needs different skills and leadership.
• On their website there are five commodity sectors with five future scenarios/needs that they have compared, leading to a need for cross sector strategies versus a general farm organization approach. Noted the Council of Presidents as having some relevance, including chairs of 24 or 25 organizations who meet to explore/ discuss common interests. Will be meeting with them again Dec 7 to specifically discuss leadership development/ going forward with investing in people.
• Outside of agriculture $/funding from government is linked to change, in agriculture it is not.
• Need to make a distinction between small and large income producers who have different needs, noting that there are commercial /similar interests in the smaller category as well so not as clear cut. However, most farms are small and not “businesses” or “life’s work” operations. OFA is “small oriented” and if you talk in a small way, then the policy focus will be small.
• Perhaps for the small income producers, there is a need to emphasize networks and engage where they want to be engaged, while for larger income producers there is a need to link with the processing sector and develop appropriate strategies. The large income producers need to be invited/focused on as individuals and in particular independent family businesses. Need then to turn to business models for government services and support and what government needs to offer may be totally different.
• In his opinion/experienced processors want a say in decision-making, and in turn would have a better understanding and more information.

• They have a more direct role with their marketing boards and/or mandatory levy collection boards, versus having a minimal role with their refundable levy organizations.
• On the merger of corn, soybeans and wheat, they see limited strategic thinking and mostly a focus on cost savings and removing overlap and duplication. Noted that it was grassroots driven and not from the organizational leadership, with an outside consultant leading the change process. Noted that the organizations have 3 distinct cultures even though 60 percent of the grain and oilseed producers grow all three, and also pointed out the very different origins and histories. They are now proceeding with a joint letter/submission to the Commission who now moves from support questions to review and engagement in needs for approval.
• Government is influenced on what they do by the organizations, even beyond the actual mandates of the organizations. It is convenient and they seem willing.
• They look to and advocate value chain representation and involvement beyond price determination.
• The Commission has six analysts on staff, each dealing with a cross-section of boards/organizations.
• They bring the commodity Boards of Directors in to meet with the Council every five years. The purpose of this is to determine their strategic focus and plans; this event is attended by the Board members and the GM is present as a listener only.
• Twice a year the Commission offers training for boards including legislation/director roles, conflict of interest, etc.
• The Commission briefs the Minister when the organizations meet with him/her but it differs depending on the Minister as to whether the Chair or others sit in.
• Staff of the Commission are Ministry staff, including acting as “account managers” for the organizations where they can work as much with the processors as the organizations themselves. They try to be advocates for industries, and not only producers. The Chair reports to the Minister directly as Chair and to the DM for his ADM responsibilities for regulated marketing.
• The processor association also comes in to meet with the Commission. The Commission needs to continue to work at being seen as arms length. They will fund or co-fund facilitators.
• Mentioned the Council of Presidents as being in existence for three years and focused on dialogue but not much for resources. The focus is on joint education and leadership development. There is some potential for increased sharing of best practices and development of strategic direction. Not overly important in their minds.
• Suggested increasing governance discussions in NASA to share experiences/ideas/best practices/etc. This would include re-examining roles in national organizations as signatories and an opportunity for “agencies” to get together to influence the national agenda. Ottawa does not have significant powers but the National Council has some mandate re organizations outside of marketing boards.

• The strategic aspect of the national organizations that are under the Council is missing at the national level as well, with the focus on marketing boards on splitting up the quantity along with a focus on decreasing or managing costs or increasing revenues. At the same time they become lobbyists when the politicians make or are going to make decisions. With some regulatory responsibility they think that they have to be regulatory.
• The Council sees the need to do things differently but there is a status quo mindset out there. There has been minimal success in the past in trying to be more strategic and institute change.
• One of the stumbling blocks nationally is the provincial aspects/requirements that may inhibit national or regional approaches, with national restrictions really in provincial marketing plans. There is a need to enable this if the producers want it, making regional entitlements that might be mobile within the region. Examples might be regional cattle efforts and dairy marketing.
• If there is a change to strategic, what does that mean in terms of outcomes? What is the balance between consumers and producer interests? What does effective accountability look like?
• Do organizations and producers know what they want - long term focus? To be strategic might need more and different resources and skills/knowledge.
• Should go to National Agency of Supervisory Agencies (NASA) to initiate something about adding strategic to operational at the national level.
• There is a significant need at the same time for improved communication among all groups including agencies with organizations, among organizations and between organizations and government.
• Informal organizations and collaboration can work but the organizations need the authority to enforce some kind of action, ie. shared services. Quebec apparently tried to streamline things at one time but industry refused – concept versus reality?
• Does not work with CFA and tends to be responsive an advocate.
• The scope of the legislation is broader than current emphasis but has not tended to be pursued / used as it is felt to be difficult to operationalise nationally.

• Have one new poultry member and only include federally inspected operations
• Functions on a national scale but also get involved in provincial issues
• Members pay voluntary fees as do associate members who are mainly others in their value chains. Canada Pork International (CPI) requires processors to first be a member of CMC and they are working on Canadian Beef Export Federation (CBEF) to see the same on the beef side. Any membership requires board approval.
• They are active in the national beef industry round table with producers but it is issue based. They also work with/through the Canadian Cattle Association (CCA) and have some member representatives who are also producers, eg. the current chairperson coming from Alberta.
• On Specified Risk Material (SRM) discussions, everyone is at the table and they have an agreement with CCA to get together.
• They do federal lobbying/advocacy and make presentations to various committees, similar to CCA.
• They don’t do much with CFA and the supply-managed commodities(SM5) (dairy and poultry) position makes it difficult for the Canada Pork Council to be a member of CMC who work with/are part of CAFTA (free trade advocates). They do however have an issue specific relationship with the Canada Pork Council, ie. animal welfare and traceability.
• Government sometimes says that they need an “industry” position and CMC will sometimes chair/facilitate. They will provide feedback especially on major or minor regulatory changes.
• They are a registered lobbyist.
• They have annual golf and fishing days and all of industry are there/involved.
• Have joint board meetings with the American Meat Institute
• They could be a more “formal” organization because they do not discuss prices

• They had a governance review 3 years ago and have been a year in implementation and of the 100+ recommendations from their consultants; only 6 were rejected as they were not considered relevant.
• Examples of changes: more effective meetings and board functioning including preparation of documents and labeling for purpose intended, a board orientation manual, yearly planning, extensive bylaw amendments/revisions, committee structure changes, better defining the roles of the President and various chairpersons, defensive /reactive attitudes to change, etc.
• Alberta Milk has one representative producer-based and the processors are best represented by their organization DPAC. Under Minister Strahl, the Dairy Industry Working Group including executives of both organizations, was quite successful and had a direct impact on the new cheese standards. They had an arms-length facilitator hired by the Minister. Yogurt standards may be the next assignment this group gets.
• Government push is critical but still the industry is needed to do/implement. Not a good idea from their experience for industry to push/insist, and therefore best results have been around issues versus creating one.
• They have a clear budget approach /funding for marketing (voluntary check-off of around $55 million) and policy/lobby work (mandatory assessment from the members and only around $250,000).
• In 2003 they took over and merged the market promotion work of Ontario, Quebec and the Maritimes (P 5), although Quebec later took back some. Deloitte is now working on possible revisions to the marketing efforts/system. They will be looking at streamlining programs and focusing on definitive goals, a further renewal of the organization. Also noted the Prairie Coalition vs the national, and BC media work as being very innovative.
• Believes that the annual planning that they do keeps the process for self improvement moving forward and suggested some advantages for an organization governance review process vs a sunset clause/evaluation approach. This is important in being “fresh” for policy work in managing crises versus being defensive as DFC can be.
• Connect internationally with the International Dairy Federation, the International Federation of Agriculture dairy group, and the US National Dairy Council. At the same time cooperation with CFA allows them to focus on their mandate. Also they share an office area but are currently planning a move. Advantages of the shared office space include sharing of ideas, sharing resources and providing sounding boards and access to some unique skills/expertise.
• Very much involved in support for the SM5 strategic discussion efforts in WTO, including a staff coordinator, a representative in Geneva and sending representatives periodically to Geneva.

• Essentially a lobby group, and with the withdrawal of most of the eastern Canadian interest groups, primarily a “western” grains lobby group
• Have seen the need to have a corporate board structure - with a specific emphasis on the need for skills-based boards. This forces a much greater strategic focus rather than an operational one.
• Recognition of the need for greater collaboration among the grains/crop industry. Many producers grow several crops on their farms and yet each crop has a separate group/organization. The need for greater efficiencies and effectiveness is evident.
• Provides regular (weekly) updates to the membership on the progress/outcomes that have been completed.

• Interested in how other provinces manage their marketing programs and are using comparatives that focus now on appeals and actions. They now deal with 170 to 200 cases per year. Their efforts include fisheries, private woodlots and agriculture products. They validate, with particular focus on legality, all contracts between buyer and sellers and are also allowed to negotiate collective contracts on behalf of the organizations and their members.
• Council has eight members, essentially full time, and meets one day a week, with the other four for hearings and writing decisions. Their decisions are only overruled by either the Supreme Court of Quebec or the Supreme Court of Canada.
• They are aggressive in representing Quebec’s joint powers under the constitution for all production in the province.
• They authorize economic (marketing, pricing, contract, etc.) regulations for around 35 organizations (15 wood, 3 fish and 16 from agriculture) and have 400 to 500 regulations to oversee. If a contract cannot be agreed upon arbitration can be requested from Council. They cannot be sued and with all decisions only to be appealed to the Supreme Court, other than 3 or 4 types of decisions that have a different appeal process.
• The Council has three functions: 1) organization supervision (can also assist with meetings) and require minutes, agendas and names for their records; 2) contract supervision (including being a “judge” in imposing contracts); and 3) performance review where each organization has to appear before them, their members and the public to demonstrate what they have done to impact on the sector for the benefit of the producers.
• When a board is requested for economic matters they make sure that they separate the “taking care of business” from the “union” part of their organizations business (general representation, etc.). They need 10 producers or more for a joint plan to be approved and then are on their own with regulations to guide them. Their administration can be as part of a syndicate or another organization. The spirit of Council’s actions is to give power to the producers.
• They consider the levy to be significant but a small portion of market/cash receipts and should be put in the context of the other expenses such as crop insurance. Buyers on the other hand often argue that they actually pay for the system.
• The assessment and recommendations of the current provincial Commission reviewing Quebec’s agriculture might have some impact on the Council and its business but hey don’t expect much. While results are not yet available there has, however, been some public comments about supply management and government assistance in general.
• The next 5 year evaluation cycle will start next April but will now be done using a new evaluation process developed with help from the University and in cooperation with UPA. There will be processors involved and will include open/public hearings where presentations will be made by the boards, processors, producers and consumers (all interested parties). The provincial ministry will also be asked to provide a sector report that would be made available in advance. In the end a report will be given including direction any actions to be carried out and deadlines.
• Council has no administrative relationship with the Ministry, only with the Minister, and can’t call on their staff resources. They function as an independent tribunal with 42 permanent staff including the board members. They need three board members to be at any hearings and they will have a secretary and assistant for each one, with decisions to be written and approved by Council. They move around the province to have those hearings. They also do permits for cereals (four to five staff) and verification of milk use (four staff). They have five legal assistants and will add a contract lawyer in reviewing with boards.
• The Council has a President and three VPs, with one having to be at each hearing. Each VP handles five or six sectors with a colleague assisting (succession planning) including at least one supply management one, with a team to work with that includes a legal assistant and “economic” assistant. The team for each is assigned by the general manager. Board members cannot be active producers and while they have diversity now, they are trying to ensure more of a skills-based selection.
• A report is required from each organization that the Council supervises within 30 days of their annual meeting and needs to include the election results, finances, etc.
• They have a good relationship with UPA, and on dealing with governance changes, the UPA leads in the “union” aspects. The Council approves the regulations for a “union” check-off for UPA but does not oversee or monitor them.
• In dealing with problems, about half are issues between producers and the boards and the other half between boards and the buyers. They now have a committee including UPA and buyers looking at improving the system.
• The Council does its own strategic planning that includes consulting with the boards and buyers. One result has been an improved hearing process. They also encourage more communication and negotiations before having to going as far as having hearings.
• Board members of the organizations have to be producers and the law does not give them any powers over others such as processors. They would need structural and legal changes, although at the same time processors are currently requesting more say/input on board matters/actions. At the same time they do not see a problem for the “union” portion of their business in this regard, only in the economic/contract parts.
• Changes in regulations always require a public hearing.
• They have sector associations in Quebec as well but while good in principle, competition limits collective action.
• The Council does intensive reviews of organizations under their mandate if there are persistent issues or litigation. They do not judge however what is good or bad for them as they feel that that is the organization’s decision.
• The organizations can own assets but not in conflict with their mandate but can ask for an exemption, ie. a beef processing plant. In this example, they had to use funds from the “union” side of their business.
• The Council has a $3.7 million budget including $1 million in fees collected.

• The number of farmers in Quebec is dropping and they have few new farmers emerging, even though the government has set up some generous programs to try and encourage new producers. For example, if they have 50 percent ownership and a qualifying academic level, they can get an establishment grant of up to $40,000. Most are still family owned although they operate under a variety of different ownership structures.
• The government only recognizes UPA as the producer voice even though there are other overarching producer organizations. All producers must register and pay an annual fee to UPA whether they choose to be a member or not (and around 2,500 of 43,000 chose not to be members, including families with more than one operation/farm). The registration card is needed to access government programs. The UPA is strictly non-partisan with a fee of around $275 plus charges for some services.
• The UPA structure has representation from local syndicates aligned in regional federations (19), along with specialized syndicates are aligned in specialist federations around products (25) and other interests like women, youth and English farmers (3). These 44 federations form the General Council of UPA and provide the 7 Executive Council members. The General Council meets 10 times per year. The regional federations can be French, English or bilingual.
• The UPA process creates much heated discussion but it has excellent solidarity once decisions are made, and in doing so has a major influence on agriculture in Quebec and federally. Originally they were linked to a separatist movement and UPA has been a supporter. They are usually united against the federal government vs. against other provinces.
• Services from UPA include accounting at a fraction of private sector options and who are trained in CAIS, death benefits, discounts on commercial goods /services like cell phones.
• QFA is a specialized syndicate under UPA, which is in turn a member of CFA. For member organizations/affiliated associations, the UPA provides audit, bookkeeping, printing, and because they own their own buildings, office space and meeting room access. UPA also rents space to other/commercial interests.
• UPA also provides training for volunteers and for representatives on General Council, per diems and travel expenses. For Executive Council, they will also give an allowance for replacement labor on their farms.
• The syndicate structure includes for each an annual meeting and semiannual policy meetings. There is a best practices guide.
• The UPA policy meeting/convention is the end of November with working groups. While most is in French, some is in English. He suggested policy representatives might want to come and experience/network at those meetings, even though there may be language problems with the presentations and several closed-door member sessions.
• A handout was provided on UPA structure and governance as well as a strategic planning document in English.