By Ian Cumming
Once again, like with Chobani several years back, the Dairy Farmers of Ontario (DFO) and the rest of the industry have a choice: Let a plant be built that will buy Ontario dairy farmers’ milk, or, once again, go to court to stop it.\
They can let an “ingredient” plant get built this spring by John Skotidakis, at St. Eugene, east of Ottawa, which also wants to contract a huge volume of extra DFO milk. Or they can call out the lawyers, as they did with Chobani, and argue the legalese and fine points of provincial and federal legislation, whether such a plant should be built.
Chobani’s concerns several years back, in direct emails to me from the U.S. yogurt giant’s then-spokesperson Nicki Briggs, were whether or not they could get enough milk from DFO and Quebec processors who owned Ontario plants. It turned out they couldn’t because the processors went to court to keep Chobani out of Canada. Chobani, which would have been a big, new buyer of Ontario milk, gave up the fight and decided to expand elsewhere.
There are similarities with Skotidakis. He processes 30-million litres of DFO milk annually and proposes a new processing “ingredient” plant, with financing already in place, to take in an additional 100-million litres of DFO class 6 milk. He’s also bringing into Canada nine milk trucks per day of American product.
When DFO found out about the trucks crossing the border, Skotidakis was summoned to a DFO meeting in late January, along with his famed lawyer Jim McIlroy, for an “out to the woodshed” moment where DFO was going to straighten things out.
If this goes to tribunal, here’s how McIlroy told me he’s going to argue. He’ll ask, how does a provincial agency like DFO have jurisdiction over a federal trade law, like duty deferral, which allows Skotidakis a loophole to import this stuff?
This is the legal program under which Skotidakis was bringing in his dairy imports two years ago when he received a $4.2-million federal cheque for processing expansion. The new federal government promised that it will end duty deferral or the Skotidakis loophole.
The dairy establishment has never let Skotidakis operate on a “I just want to buy milk” basis. Was he a maverick or rebel? You decide. But he was in trouble from the get-go. DFO piled on to put him out of business in 1995 when he was a 24-year-old running a goat milk processing plant that didn’t need quota. At that time, he wanted to introduce cow’s milk and was happy to buy quota to do so. But the rules wouldn’t let him.
The rules then stated you couldn’t buy plant quota with an existing non-quota plant. You actually had to buy a plant that had plant quota to acquire the quota. Skotidakis thought that was nuts and simply started buying non-quota milk from at least three area farmers.
The rules changed in recent years with the introduction of “innovative quota” for small, start-up plants.
Press reports, written back in the fall of 1995 by then Farm and Country, outlined the tribunal fix for Skotidakis, noting “plant owner, 24-year-old John Skotidakis, has rocked Ontario’s milk system.”
Farm and Country reported that, “the plant had been free to operate and export cheese without a licence.”
DFO delegates signed a petition calling on provincial agriculture minister Noble Villeneuve to deny Skotidakis a licence.
Villeneuve thought the whole thing was out of order, overruled on the plant quota rules and ordered DFO to sell milk to Skotidakis. Good thing for producers that Skotidakis fought the braying mob. If DFO signs Skotidakis’ contract now, that’s an extra 130-million litres in demand per year in Eastern Ontario. A lot of cows that.
But back in 1995, DFO “also sought penalties against farmers shipping to the (Skotidakis) plant,” Farm and Country reported. That was successful. Some farmers lost a large chunk of their quota.
Also in 1995, DFO lawyer Geoffrey Spurr stated “the integrity of the system is more important than the community or value of the plant.”
It’s the exact same argument they need to stand on to stop the Skotidakis plant today. Like they did with Chobani.
Ian Cumming is a former Glengarry County dairy farmer and now farms with his son in northern New York state.
