O.C. 341/2002

July 10, 2002

A.R. 151/2002

July 11, 2002

   

    A P P E N D I X

    Marketing of Agricultural Products Act

    ALBERTA MILK MARKETING REGULATION

    Table of Contents

    Part 1

    General

Interpretation 1

License required 2

Application for licence 3

Types of licences 4

Licence not transferable 5

Issue, renewal or refusal of licence 6

Suspension or cancellation of licence 7

Processor records to be maintained 8

Container identification 9

Service charge 10

Disposition, appeals 11

Written orders, etc. 12

    Part 2

    Marketing

    Division 1

    Quota

Fluid milk quota 13

Fluid milk quota maintenance adjustment 14

Market share quota 15

Market share quota maintenance adjustment 16

Quota adjustment 17

Quota abeyance 18

Cancellation of quota 19

Quota transfers 20

Appointment of attorney 21

Quota lease 22

    Division 2

    Milk Delivery, Prices

Milk volume 23

Milk delivery 24

Milk transferred to another processor 25

Class priorities 26

Regulated product classification 27

Class prices 28

Pooling 29

Raw milk grades 30

Grade and price adjustment 31

Inhibitors, drug residue ramifications 32

    Division 3

    Reports, Payments

Information to be provided 33

Monthly report 34Payment to producers 35

Payments 36

Processor payment adjustment 37

Payment statement 38

Adjustments 39

    Division 4

    Variation in Authorized Marketing

Reclassification of contracted export milk 40

Contracted export milk audit 41

    Division 5

    Prohibitions

Purchasing below minimum price 42

Processed milk prohibition 43

Substance removal prohibited 44

Condition prohibition 45

Licence required to market 46

Licence required 47

    Part 3

    Expiry and Coming into Force

Expiry 48

Coming into force 49

    PART 1

    GENERAL

Interpretation

 

1(1)  In this Regulation,

    (a) "buttermilk" means fluid milk that contains not less than 8.25% milk solids-not-fat and to which lactic acid producing bacteria or similar culture has been added;

    (b) "chocolate milk" means fluid milk that contains not less than 3.25% and not more than 3.60% of milk fat, and not less than 8.25% milk solids-not-fat, to which a chocolate flavour has been added;

    (c) "chocolate partly skimmed 1% milk" means milk that contains not less than 1.00% and not more than 1.50% milk fat, to which a chocolate flavour has been added;

    (d) "chocolate partly skimmed 2% milk" means fluid milk that contains not less than 2.00% and not more than 2.50% of milk fat, to which a chocolate flavour has been added;

    (e) "6% cream" means fluid milk that contains not less than 6.00% milk fat;

    (f) "10% cream" means fluid milk that contains not less than 10.00% milk fat and not more than 10.50% milk fat;

    (g) "18% cream" means fluid milk that contains not less than 18.00% milk fat;

    (h) "dairy plant" means a building where a processor processes a dairy product, and the land associated with that building;

    (i) "dairy year" means the 12-month period as designated in the regulations under the Canadian Dairy Commission Act (Canada);

    (j) "delivery" occurs when a processor receives, at the dairy plant, regulated product that cannot be rejected pursuant to this Act or the Dairy Industry Act;

    (k) "Director" means Director as defined in the Dairy Industry Act;

    (l) "eggnog" means fluid milk to which has been added flavouring ingredients and sweeteners plus emulsifiers or stabilizers;

    (m) "excess milk" means milk delivered by producers to a processor's dairy plant that is not classified as sub-class 1a milk and that is not contracted export milk;

    (n) "flavoured milk" means standard milk, partly skimmed 2% milk, partly skimmed 1% milk, skim milk or cream, to which a flavour has been added;

    (o) "fluid milk" means any products of milk that are supplied, processed or marketed in fluid form, other than evaporated or condensed milk packaged in cans;

    (p) "fluid milk quota" means the number of litres of milk per day allotted for fluid milk to a producer by Alberta Milk pursuant to this Regulation;

    (q) "heavy cream" means fluid milk that contains 40.00% milk fat or more and that may have sugar added;

    (r) "homogenized milk" means fluid milk that has been subjected to a mechanical treatment that prevents separation of the milk fat;

    (s) "inhibitor" means inhibitor as defined in the Dairy Industry Regulation (AR 139/99);

    (t) "licence" means a licence issued by Alberta Milk under this Regulation;

    (u) "market share quota" means the number of kilograms of milk fat for a dairy year allotted by Alberta Milk pursuant to this Regulation to a producer as the producer's share of the provincial entitlement;

    (v) "milk component" means milk fat, protein and other solids or other components of milk designated by Alberta Milk;

    (w) "1% partly skimmed milk" means fluid milk that contains not less than 1.00% and not more than 1.50% of milk fat and not less than 8.25% milk solids-not-fat;

    (x) "2% partly skimmed milk" means fluid milk that contains not less than 2.00% and not more than 2.50% of milk fat and not less than 8.25% milk solids-not-fat;

    (y) "processed milk" means milk that is pasteurized, homogenized, packaged or treated so that its form or composition is altered in any manner from the form or composition in which it was received from the producer;

    (z) "provincial entitlement" means the combination of federal quota, as defined in the Dairy Products Marketing Regulations under the Canadian Dairy Commission Act (Canada), that is authorized for Alberta with respect to a dairy year and quota for intra-provincial trade authorized by Alberta Milk that is allocated by Alberta Milk to producers to ensure that the Provincial Market Sharing Quota allocated to Alberta under the federal-provincial agreement known as the National Milk Marketing Plan is produced and marketed during that dairy year;

    (aa) "provincial reserve" means an amount of unallocated market share quota resulting from

        (i) a producer's going out of business,

        (ii) a producer's delivering less than the maintenance requirement of the producer's market share quota, or

        (iii) any other source;

    (bb) "skim milk" means fluid milk that contains not more than 0.10% of milk fat and not less than 8.50% of milk solids-not-fat;

    (cc) "specialty milk" means processed milk in fluid form, the composition of which has been altered or to which has been added flavourings, colour or bacterial culture and, without limiting the generality of the foregoing, includes buttermilk, eggnog, cordials, acidophilus milk, kefir, chocolate milk, flavoured milk and concentrated liquid milk;

    (dd) "standard milk" means fluid milk that contains not less than 3.25% of milk fat and not more than 3.60% of milk fat and not less than 8.25% milk solids-not-fat;

    (ee) "whipping cream" means fluid milk that contains not less than 32.00% of milk fat.

(2)  A reference to a class or sub-class of milk means a class or sub-class of milk as set out in section 27.

(3)  The words defined in the Alberta Milk Plan Regulation apply to this Regulation.

(4)  A reference to the Dairy Industry Act includes a reference to the regulations under that Act.

Licence required

 

2(1)  A person who is a producer or processor must hold a licence issued by Alberta Milk.

(2)  A person who holds a licence must comply with the terms or conditions of the licence.

Application for licence

 

3   An application for a licence must

    (a) be made to Alberta Milk on a form satisfactory to Alberta Milk,

    (b) include a recommendation by the Director,

    (c) include the approval of any municipality or other person or agency that Alberta Milk requires, and

    (d) for producers, be accompanied by a fee of $25.

Types of licences

 

4(1)  Alberta Milk may issue

    (a) a producer licence, or

    (b) a processor licence.

(2)  A producer licence authorizes the licensee to produce regulated product for delivery to a processor to whom the licensee has been directed by Alberta Milk to deliver regulated product.

(3)  A processor licence authorizes the licensee

    (a) to accept regulated product and agricultural product for processing, as directed by Alberta Milk,

    (b) to operate a dairy plant, and

    (c) to market dairy product from that dairy plant.

(4)  A person may hold both a producer licence and a processor licence.

Licence not transferable

 

5   A licence issued by Alberta Milk is not transferable.

Issue, renewal or refusal of licence

 

6(1)  If Alberta Milk is satisfied that the applicant meets the requirements of this Regulation and the requirements of the Dairy Industry Act, it may issue a licence to an applicant.

(2)  Alberta Milk shall not issue more than one producer licence with respect to a dairy farm operated as a unit at one location or more than one processor licence with respect to a dairy plant operated as a unit in one location.

(3)  Alberta Milk may include conditions in the licence.

(4)  In addition to conditions referred to in subsection (3), the requirements of the Act, this Regulation, the Dairy Industry Act, the Alberta Milk Plan Regulation and administrative orders and directives of Alberta Milk pursuant to this Regulation are conditions of a licence issued under this Regulation.

(5)  A licence issued under this Regulation may not apply to more than one dairy farm or dairy plant.

Suspension or cancellation of licence

 

7(1)  Licences issued by Alberta Milk continue in effect unless suspended or cancelled.

(2)  Alberta Milk may suspend or cancel a licence if

    (a) the Board finds that the licensee has not complied with the Act, the Alberta Milk Plan Regulation, this Regulation, the Dairy Industry Act, conditions of the licence or terms of an agreement entered into pursuant to the Alberta Milk Negotiation and Arbitration Regulation,

    (b) the suspension or cancellation has been recommended by the Director, in the case of an alleged contravention of the Dairy Industry Act,

    (c) an assessment or fee under the Dairy Industry Act or a levy, service charge, fee or assessment under the Alberta Milk Plan Regulation remains unpaid for a period of 30 or more days after it is due,

    (d) there has been a change

        (i) in the ownership or location of any dairy farm or dairy plant in respect of which the licence is issued, or

        (ii) in the address or ownership of the licensee,

    (e) a producer contravenes section 24(1), or

    (f) a processor accepts delivery of regulated product from a producer other than a producer directed to the processor by Alberta Milk.

(3)  If a licence is suspended or cancelled under this section, Alberta Milk must notify the Director and the person to whom the licence was issued of that suspension or cancellation.

(4)  If a licence is suspended or cancelled, the person to whom the licence was issued

    (a) must, on receiving a notice of the suspension or cancellation, immediately cease engaging in the activity authorized by the licence, and

    (b) may apply to Alberta Milk for an order staying the suspension or cancellation pending the determination of a review or an appeal under Part 5 of the Act.

Processor records to be maintained

 

8(1)  A processor must maintain books, records and accounts, including agricultural product sold and setting out clearly how the processor's business pursuant to the Alberta Milk Plan Regulation and this Regulation is carried out.

(2)  A processor must maintain a record of all agricultural product transferred to any branch of that processor or to any dairy plant.

(3)  A processor must keep at the processor's place of business complete records of the dairy product sales.

(4)  A processor must make records available on request for reconciliation and verification audit purposes.

(5)  Any fee for any reconciliation or verification audit under subsection (4) must be shared equally by the processor and Alberta Milk.

(6)  Each dairy plant must be audited under this section at least once each dairy year in accordance with the directives and administrative orders of Alberta Milk.

Container identification

 

9   A processor must identify, by code on each container, the location of the dairy plant where each container of dairy product is processed and must file the code with Alberta Milk.

Service charge

 

10(1)  A licensed producer must pay service charges for each hectolitre of raw milk, except farm-separated cream, received within the meaning of section 30(2).

(2)  The service charges referred to in subsection (1) are the following:

    (a) for marketing and nutrition education

        (i) $1.03 for each hectolitre, on the coming into force of this Regulation;

        (ii) $1.11 for each hectolitre, as of January 1, 2003;

        (iii) $1.19 for each hectolitre, as of January 1, 2004;

    (b) for research $0.02 for each hectolitre;

    (c) for the proper administration of the plan, as set by a directive or administrative order of Alberta Milk.

(3)  Alberta Milk may require processors to deduct service charges from producers and remit the amounts to Alberta Milk.

(4)  Alberta Milk may charge interest on late payment of service charges at the rate of 1% per month.

(5)  Despite subsection (1), producers of contracted export milk must pay service charges with respect to the contracted export milk only under subsection (2)(c).

(6)  Despite subsection (1), producers of farm-separated cream must pay service charges for the administration of the plan, with respect to each kilogram of milk fat delivered to a processor, as set by a directive or administrative order of Alberta Milk.

(7)  A service charge and interest on it is a debt due to Alberta Milk and may be recovered by legal action.

Disposition, appeals

 

11   An application to Alberta Milk for the disposition of any matter must be made in writing and must be signed by the person making the application.

Written orders, etc.

 

12(1)  Any order, directive, permission, authorization or approval of Alberta Milk required or referred to in this Regulation made with respect to a particular producer or a particular processor does not have any effect unless that producer or processor is notified in writing.

(2)  Subsection (1) does not apply to sections 24(1), (2) and (8), 35(1) and 36.

    PART 2

    MARKETING

    Division 1

    Quota

Fluid milk quota

 

13(1)  Alberta Milk may set provincial fluid milk quota requirements to meet market demands.

(2)  When changes occur in the provincial fluid milk market, Alberta Milk may increase or decrease a fluid milk quota.

(3)  Alberta Milk may allot fluid milk quota to producers.

(4)  A fluid milk quota allotted to a producer by Alberta Milk remains in effect until it is

    (a) cancelled under section 19,

    (b) increased or decreased under this section, or

    (c) reduced under section 14.

Fluid milk quota maintenance adjustment

 

14(1)  A licensed producer must deliver no less than 90% of the producer's fluid milk quota, calculated on a daily basis, during the months of September, October, November and December.

(2)  Subject to section 18(3), if a licensed producer delivers less than the amount prescribed in subsection (1), in the January following the months used to calculate maintenance adjustments, Alberta Milk may reduce the producer's fluid milk quota by the number of litres per day that the producer failed to deliver in subsection (1).

(3)  If a producer's milk fluid quota is reduced under subsection (2), the producer may apply to Alberta Milk to have that quota reinstated.

Market share quota

 

15(1)  Alberta Milk may allot market share quota from the provincial entitlement to all producers on a basis as determined by Alberta Milk.

(2)  Alberta Milk may retain a portion of the provincial entitlement of market share quota in a provincial reserve.

(3)  Alberta Milk may allot all or part of the provincial reserve.

(4)  Nothing in this section requires Alberta Milk to allot any market share quota if the provincial entitlement would be exceeded.

(5)  When changes occur in the Canadian domestic market, Alberta Milk may, in accordance with the National Milk Marketing Plan, adjust the market share quota allotted to each producer.

Market share quota maintenance adjustment

 

16(1)  A licensed producer must deliver no less than 90% of the producer's market share quota in accordance with directives and administrative orders issued by Alberta Milk.

(2)  Subject to section 18(3), if a producer delivers less than the amount prescribed in subsection (1), Alberta Milk may reduce the producer's market share quota by the number kilograms of milk fat that the producer failed to deliver in accordance with subsection (1).

(3)  If a producer's market share quota is reduced under subsection (2), a producer may apply to Alberta Milk to have that quota reinstated.

Quota adjustment

 

17   Alberta Milk shall not adjust the quota of any producer because all or any part of the regulated product received within the meaning of section 30(2) is subsequently rejected by the processor pursuant to the Dairy Industry Act.

Quota abeyance

 

18(1)  Despite sections 14 and 16, a producer may apply to Alberta Milk to hold the producer's quota in abeyance

    (a) if the producer's herd or production from the herd is affected by a catastrophe, including but not limited to severe illness or death of the quota holder, sudden death of a significant part of the producing herd, destruction of the production facilities, severe infection of an uncontrollable disease in the dairy herd or a disease for which the health authorities require that the dairy herd be slaughtered, or

    (b) for any other reason that is acceptable to Alberta Milk.

(2)  On receipt of an application under subsection (1), Alberta Milk may hold the producer's quota in abeyance for a period as determined by Alberta Milk.

(3)  If quota is held in abeyance, sections 14, 16 and 19 do not apply.

Cancellation of quota

 

19(1)  Subject to section 18(3), Alberta Milk may cancel a quota if

    (a) the producer's licence is suspended for 2 weeks or more, or cancelled,

    (b) the producer does not deliver in accordance with the producer's fluid milk quota for a period of 2 consecutive weeks or more,

    (c) the producer does not deliver in accordance with the producer's market share quota for 2 consecutive months,

    (d) the producer contravenes the terms and conditions of the producer's licence, or

    (e) the producer contravenes the Act, the Alberta Milk Plan Regulation, this Regulation or the Dairy Industry Act.

(2)  If a producer's quota is cancelled under subsection (1), the producer may apply to Alberta Milk to have that quota reinstated.

Quota transfers

 

20(1)  A quota may be transferred only with prior written approval of Alberta Milk.

(2)  A producer applying to transfer a quota must submit the application to Alberta Milk on forms supplied by Alberta Milk at least 14 days prior to the requested transfer date unless the number of days is reduced by a directive of Alberta Milk.

(3)  A transfer of quota is effective on the first day of a month.

(4)  If a producer transfers all of the market share quota allotted to the producer to another producer,

    (a) the unused portion of the market share quota is available to the transferee for the quota period in which the transfer is approved by Alberta Milk, and

    (b) the whole of the acquired market share quota is available to the transferee in the next quota period,

subject to the delivery requirements in section 16.

(5)  If a producer who has quota reinstated pursuant to section 14, 16 or 19 applies to transfer quota within 2 years from the time of reinstatement, the amount of quota equal to the amount of reinstated quota is not available for a transfer and reverts to the provincial reserve.

Appointment of attorney

 

21(1)  A person who has loaned money to a producer may apply to Alberta Milk to register an appointment of attorney.

(2)  An appointment of attorney must be in a form satisfactory to Alberta Milk.

(3)  An appointment of attorney is only effective from the date Alberta Milk acknowledges in writing that it is registered.

(4)  Only one appointment of attorney may be registered in respect of a producer.

(5)  Alberta Milk shall not register an appointment of attorney unless it is signed by the producer that is affected by it.

Quota lease

 

22(1)  A producer may lease quota for any monthly period within the dairy year.

(2)  A quota may be leased only with prior written approval of Alberta Milk.

(3)  A producer applying to lease quota must submit the application to Alberta Milk at least 14 days prior to the proposed lease date on forms supplied by Alberta Milk.

(4)  A lease of quota is effective on the first day of a month.

(5)  A producer who holds leased quota is subject to the service charges for the regulated product deliveries made under the leased quota and subject to any interest charges for late payment under section 10.

    Division 2

    Milk Delivery, Prices

Milk volume

 

23(1)  A bulk milk tank must be levelled and calibrated in accordance with directives and administrative orders of Alberta Milk to ensure accurate measurement of the volume of milk contained in the bulk milk tank.

(2)  The volume measured in a bulk milk tank calibrated in accordance with subsection (1) by a bulk milk grader pursuant to the Dairy Industry Act is the volume on which payment is based.

Milk delivery

 

24(1)  A producer may only allow transportation of regulated product from the dairy farm, in accordance with the Dairy Industry Act and with directives and administrative orders of Alberta Milk.

(2)  The operator of a milk transport vehicle must transport regulated product from a producer to a processor as required by directives and administrative orders of Alberta Milk.

(3)  Alberta Milk has no obligation to direct milk be delivered to a particular processor, and without limiting the generality of the foregoing, Alberta Milk may decline to direct that milk be delivered to a processor that is indebted to Alberta Milk.

(4)  The period of time between 2 deliveries of milk from a producer must be in accordance with the Dairy Industry Regulation (AR 139/99).

(5)  If Alberta Milk is notified by the Director under the Dairy Industry Act of a change in the period between 2 deliveries of milk referred to in subsection (4), Alberta Milk must notify the affected processor.(6)  A processor shall not reject any regulated product that is delivered in accordance with this Regulation and the Dairy Industry Act by producers directed to deliver to the processor by Alberta Milk.

(7)  Alberta Milk may set transportation rates and routes.

(8)  A person operating a milk transport vehicle will be paid compensation in accordance with directives and administrative orders of Alberta Milk.

(9)  This section does not apply to farm-separated cream.

Milk transferred to another processor

 

25(1)  Subject to subsection (3), and to an agreement entered into pursuant to the Alberta Milk Negotiation and Arbitration Regulation, Alberta Milk may direct regulated product to a processor or between processors.

(2)  Payment for milk transferred under subsection (1) must be calculated and then invoiced or credited to processors in accordance with the directives and administrative orders of Alberta Milk.

(3)  The directing of regulated product between processors pursuant to subsection (1) does not apply to contracted export milk.

Class priorities

 

26(1)  The highest priority of use of milk classified in accordance with section 27 is given to class 1 and the priority descends to the lowest class which is class 5, except for sub-class 4m which is lower than class 5.

(2)  The priority of a sub-class of milk is the same as the priority of its class except for sub-class 3a milk which has a higher priority than sub-class 3b.

(3)  Subject to sections 24(3) and 25, if a processor requires milk for a higher priority use, another processor must, at the request of the processor who requires the milk, redirect milk to that processor in accordance with any directives and administrative orders of Alberta Milk in respect of the transfer.

(4)  Subject to an agreement between Alberta Milk and a processor, all costs related to the transportation of milk under this section are the responsibility of Alberta Milk.

Regulated product classification

 

27(1)  Regulated product, other than contracted export milk, is classified according to how a processor uses it.

(2)  Regulated product, other than contracted export milk, is classified as follows:

    (a) class 1 milk, which consists of the following sub-classes of milk:

        (i) sub-class 1a, which means milk in liquid form and includes standard milk, 2% partly skimmed milk, 1% partly skimmed milk, skim milk, modified enriched milk and kosher milk;

        (ii) sub-class 1b milk, which means cream in liquid form and includes whipping cream, 18% cream, 10% cream, 6% cream and heavy cream;

        (iii) sub-class 1c milk, which means specialty milk;

        (iv) sub-class 1d milk, which means milk in liquid form that is marketed in the Yukon Territory, the Northwest Territories, Nunavut or off-shore within the meaning of this section;

    (b) class 2 milk, which means milk used in the manufacture of sour cream, yogurt, cultured products, ice cream, frozen yogurt or other frozen products, meal replacement beverages, soup bases, puddings or infant formulas;

    (c) class 3 milk, which consists of the following sub-classes of milk:

        (i) sub-class 3a milk, which means milk used in the manufacture of cottage cheese, fresh curd or any other cheese that is designated by Alberta Milk as specialty cheese;

        (ii) sub-class 3b milk, which means milk used in the manufacture of cheddar cheese, light cheddar cheese, kosher cheese, stirred curd, creamy cheese bases or cheese mixes;

    (d) class 4 milk, which consists of the following sub-classes of milk: (i) sub-class 4a milk, which means milk used in the manufacture of all types of butter, all types of milk powder, casein, caseinate, condensed milk as an ingredient in the food industry and butter oil;

        (ii) sub-class 4b milk, which means milk used in the manufacture of condensed milk and sweetened condensed milk for retail sale;

        (iii) sub-class 4c milk, which means milk used in the manufacture of classified products designated by Alberta Milk as new to the Alberta market;

        (iv) sub-class 4d milk, which means milk

            (A) used in the manufacture of processed animal feed or a new product that has not yet been classified, or

            (B) involved in inventory and dairy plant losses;

        (v) sub-class 4m milk, which means milk used for sleeve production, structural surplus and over-quota production, within the meaning of the National Milk Marketing Plan;

    (e) class 5 milk, which consists of the following sub-classes of milk:

        (i) sub-class 5a milk, which means milk used for the further processing of cheese products;

        (ii) sub-class 5b milk, which means milk used for the further processing of non-cheese products;

        (iii) sub-class 5c milk, which means milk used for confectionary products;

        (iv) sub-class 5d milk, which means milk used for processing into products not mentioned in subclause (i), (ii) or (iii).

(3)  For the purposes of this section, dairy products are marketed off-shore if they are

    (a) marketed outside Canada,

    (b) delivered to a bonded warehouse or a ship chandler for marketing outside Canada, or

    (c) sold to a foreign registered cruise ship operating in, or a foreign registered ship normally operating outside, Canadian territorial waters, other than one owned or operated by the Government of Canada or of a province, or any of its agencies.

(4)  In this section, "inventory and dairy plant losses" means milk receiving and processing losses as confirmed by audit, including extraordinary losses such as transportation or shipping accidents, spillage prior to processing, processing losses in the production of finished products, class 1 returns and unaccounted milk losses at the dairy plant up to 2% of milk delivered to the dairy plant.

(5)  Losses in excess of 2% of dairy plant receipts referred to in subsection (4) must be prorated to each class and sub-class of milk processed in the dairy plant.

Class prices

 

28(1)  Subject to this section, a processor must make payment for all milk delivered to the processor on behalf of producers at not less than the prices set out in orders of the Alberta Energy and Utilities Board and directives and administrative orders of Alberta Milk.

(2)  The price for sub-class 1a milk is the price prescribed by the Alberta Energy and Utilities Board in accordance with section 5 of the Alberta Milk Plan Regulation.

(3)  Alberta Milk may set the conversion rates for the purpose of determining the volume of class 1 milk used to process class 1 dairy products.

(4)  Alberta Milk may, by directives or administrative orders, set a minimum price for excess milk

    (a) on its own initiative, or

    (b) if requested in writing by an organization of processors or 5% of the producers.

(5)  Subject to any agreement entered into pursuant to the Alberta Milk Negotiation and Arbitration Regulation, Alberta Milk may set prices for the components of milk.(6)  The price for excess milk is the price set out in a directive or administrative order of Alberta Milk.

(7)  Alberta Milk must announce prior to the effective date the minimum price for sub-class 1a milk and excess milk set in accordance with the Alberta Milk Plan Regulation and this Regulation.

(8)  This section does not apply to contracted export milk.

Pooling

 

29(1)  Alberta Milk may operate one or more producer payment pools for the purpose of sharing milk revenue derived from the sale of sub-class 1a milk and excess milk in Alberta by producers to processors, and may make directives and administrative orders respecting pricing and payment mechanisms for the purposes of the pools.

(2)  If milk is rejected pursuant to the Dairy Industry Act, Alberta Milk must use money collected for grade price adjustments under this Regulation to

    (a) pay producers directly on behalf of processors or pay processors who in turn must pay producers whose milk yielded a negative inhibitor test result, and

    (b) pay milk transportation compensation claims in accordance with directives and administrative orders of Alberta Milk for shipments of milk rejected at a dairy plant.

(3)  Any money remaining under subsection (2) after making payments under subsection (2)(a) and (b) must be paid on a monthly basis to a producer payment pool operated under this section.

(4)  If in a month payments under subsection (2)(a) and (b) are greater than the money collected that month for grade and price adjustments, the payments must be made first from that money and the balance of the payments must be made from the producer payment pool operated under this section.

(5)  Alberta Milk must publish monthly the results of each producer payment pool showing how payment to producers was determined.

(6)  Alberta Milk may, in conjunction with the producer payment pools operated by Alberta Milk under this section (a) set out all amounts payable among processors, producers and Alberta Milk under this Regulation and the Dairy Industry Act, and

    (b) direct processors to pay the net amounts determined by Alberta Milk to be owing,

and on such setting out and direction the processors, producers and Alberta Milk must pay the net amounts so determined and are relieved from payment of the constituent obligations included in determining the net amounts owing.

(7)  Except for grade and price, producer payments for contracted export milk are not made through a producer payment pool.

(8)  Alberta Milk may deduct an amount from the pool for expenses with respect to the operation of the pool.

(9)  Alberta Milk may deduct service charges and levies from producers, including but not restricted to inspection costs, transportation, testing and grading costs and other costs required to ensure the proper operation of the plan.

Raw milk grades

 

30(1)  The grade of a producer's milk that is received by a processor must be determined monthly by testing by an analyst in an approved laboratory.

(2)  For the purposes of this section, milk is received when it is transferred from a bulk milk tank to a milk transport vehicle.

(3)  For the purpose of determining the grade of a producer's raw milk other than farm-separated cream, an infraction has occurred each time that a producer's raw milk other than farm-separated cream

    (a) does not meet the requirements of Schedule 2, other than temperatures and somatic cell count, of the Dairy Industry Regulation (AR 139/99), or

    (b) does not meet the requirements of Schedule 2 of the Dairy Industry Regulation (AR 139/99) for somatic cell count during the current month, if the milk exceeded the somatic cell count requirement in each of the 2 preceding months and no infraction of that requirement was deemed to have occurred in either of the 2 preceding months.(4)  A producer's raw milk must be graded with respect to a particular month as

    (a) Grade 1 if there is no infraction during that month,

    (b) Grade 2 is there is one infraction with respect to bacteria count, freezing point or somatic cell count during the month but there were no infractions in the preceding 365 days,

    (c) Grade 3 if

        (i) there is one infraction with respect to drug residues during the current month but there were no infractions in the preceding 365 days, or

        (ii) there were 2 infractions in the preceding 365 days and at least one of the infractions occurred during the current month,

    (d) Grade 4 if there were 3 infractions in the 365-day period and at least one of the infractions occurred during the current month,

    (e) Grade 5 if there were 4 infractions in the 365-day period and at least one of the infractions occurred during the current month, or

    (f) Grade 6 if there were 5 or more infractions in the 365-day period and at least one of the infractions occurred during the current month.

Grade and price adjustment

 

31(1)  The price payable to producers for regulated product must be adjusted for the month in which an infraction described in section 30 occurs according to the following grade schedule:

    (a) Grade 1 - 100% of the gross producer returns;

    (b) Grade 2 - 100% of the gross producer returns with a warning letter;

    (c) Grade 3 - 95% of the gross producer returns;

    (d) Grade 4 - 92.5% of the gross producer returns;

    (e) Grade 5 - 90% of the gross producer returns;

    (f) Grade 6 - 85% of the gross producer returns.

(2)  If a producer is subject to a grade and price adjustment under subsection (1), Alberta Milk must deduct the appropriate adjustment fees from the gross producer returns and pay the amount deducted to the pool on or before the 15th day after the end of the month in which the infraction occurred.

(3)  If a producer of contracted export milk is subject to a grade and price adjustment under subsection (1), the processor who received the milk must deduct the appropriate adjustment fees from the gross producer returns and pay the amount deducted to Alberta Milk on or before the 15 day after the end of the month in which the infraction occurred.

(4)  If a processor fails to deduct and pay the grade and price adjustment under subsection (3) to Alberta Milk, the amount of the grade and price adjustment and any interest is a debt due to Alberta Milk by that processor and may be recovered by legal action.

Inhibitors, drug residue ramifications

 

32(1)  A processor that uses any shipment of milk from a producer that is found, when tested in accordance with the Dairy Industry Regulation (AR 139/99), to contain an inhibitor or a drug residue must pay to Alberta Milk the gross producer return in respect of that shipment that is withheld from the producer on or before the 15th day after the end of the month in which the shipment was delivered.

(2)  If a shipment of milk is rejected by a processor because of a positive inhibitor or drug residue test conducted in accordance with the Dairy Industry Regulation (AR 139/99) on a sample taken from the shipment at the dairy plant, Alberta Milk, on behalf of the processor, may ensure that the gross producer returns of the producers whose milk in the shipment yielded negative drug residue tests are not adjusted because of the positive inhibitor or drug residue test results for the shipment.

(3)  Notwithstanding subsection (2), if none of the producer samples in a shipment of milk rejected under subsection (2) test positive in an inhibitor or drug residue test conducted in accordance with the Dairy Industry Regulation (AR 139/99), the processor is liable to pay producers for the milk.

(4)  If a processor rejects milk for the presence of inhibitors or drug residues and the presence of inhibitors or drug residues is confirmed by a test in an approved laboratory, the processor is not liable to pay the producers for the milk and the producers whose milk that forms part of the rejected milk and did not test positive for inhibitors or drug residues must be paid for that milk pursuant to section 29(2).

(5)  A processor shall not pay a producer in respect of milk that does not meet the requirements of Schedule 2 of the Dairy Industry Regulation (AR 139/99) with respect to inhibitors and drug residues.

    Division 3

    Reports, Payments

Information to be provided

 

33(1)  A producer or processor must provide information that Alberta Milk requires for the purposes of this Regulation in the form and at the times required by Alberta Milk.

(2)  Alberta Milk must, on or before the 13th day of each month, notify each processor with respect to regulated product, other than contracted export milk, delivered in the previous month of

    (a) the prices for milk and excess milk,

    (b) the amount of milk in each class, and

    (c) the totals of the amounts computed under section 37.

Monthly report

 

34(1)  A processor must, on or before the 8th day of each month furnish Alberta Milk with a report of the following for the preceding month in a form satisfactory to Alberta Milk:

    (a) the total regulated product;

    (b) the source of the milk;

    (c) the volume used in each class of milk;

    (d) the kilograms of components in each class of milk;

    (e) the volume of any rejected regulated product;

    (f) the amount and package size of each milk product;

    (g) the production of special classes of milk;

    (h) the volume of contracted export milk.

(2)  The report must be accompanied by an itemized invoice for any costs incurred by the processor in respect of matters referred to in section 25 for the preceding month.

Payment to producers

 

35(1)  Subject to subsection (2) and any deductions or adjustments permitted by this Regulation, a processor or Alberta Milk on behalf of processors, must make payment for all milk delivered to them from a producer at not less than the prices set out in orders of the Alberta Energy and Utilities Board and directives and administrative orders of Alberta Milk.

(2)  Subsection (1) does not apply to contracted export milk.

Payments

 

36(1)  In managing the pool Alberta Milk may, on behalf of processors, pay each producer directed to deliver milk to a processor for milk delivered based on the amount of each class of milk delivered and the price in accordance with section 28.

(2)  In managing the pool Alberta Milk may, on behalf of processors, pay each producer for milk delivered the same price for the milk calculated on the same basis.

(3)  Subject to subsection (7), in managing the pool Alberta Milk may, on behalf of processors, make an interim or advance payment of at least 50% of the payment under subsection (1) on or before the first day after the end of each month to a producer for milk delivered to a dairy plant from the producer during the previous month.

(4)  Subject to subsection (7), if Alberta Milk is paying producers on behalf of processors, a processor must make payment to Alberta Milk for pooling purposes

    (a) for the first 15 days of milk receipts 4 banking days before the beginning of each month, and

    (b) for a final payment on or before the 15th of the month following receipt of milk.(5)  Subject to subsection (7), Alberta Milk may, by directive or administrative order, require a processor to provide security satisfactory to Alberta Milk.

(6)  Alberta Milk is authorized to take legal action to collect money owing to producers for regulated product.

(7)  Subsections (3), (4) and (5) are subject to any agreement entered into pursuant to the Alberta Milk Negotiation and Arbitration Regulation.

Processor payment adjustment

 

37   Subject to any agreement entered into pursuant to the Alberta Milk Negotiation and Arbitration Regulation, if a processor is required by Alberta Milk to pay a producer more or less than the total price obtained by the processor for the milk marketed by the processor, as calculated pursuant to directives and administrative orders referred to in section 35,

    (a) on or before the 15th day after the end of the month during which the milk was received within the meaning of section 30(2), that processor must pay to Alberta Milk the amount by which the price obtained for the milk marketed by the licensee is greater than the amount that the processor must pay to producers pursuant to sections 28 and 35, and

    (b) on or before the 17th day after the end of the month during which the milk was received within the meaning of section 30(2), Alberta Milk must pay to every processor the amount by which the price obtained for the milk marketed by the licensee is less than the amount that the processor must pay to a producer pursuant to sections 28 and 35.

Payment statement

 

38   A producer's payment statement must include the following:

    (a) the name of the producer and the producer's Canadian Dairy Commission registration number;

    (b) the statement period covered;

    (c) the number of days in the statement period;

    (d) the date of receipt of deliveries;

    (e) the hectolitres in each delivery; (f) the total volume and milk components of milk delivered;

    (g) the milk fat, protein and other solids test results;

    (h) the price for milk used for each producer payment pool established by Alberta Milk under this Regulation;

    (i) details of all advances and adjustments;

    (j) deductions under section 29(9).

Adjustments

 

39   If in the process of verification of receipts or payments of a processor Alberta Milk discovers any error resulting in money due

    (a) to Alberta Milk from a processor,

    (b) to a processor from Alberta Milk, or

    (c) to a producer from a processor,

Alberta Milk must promptly notify the processor of any amount due, and payment must be made on or before the next due date for making a payment into or out of the pool under section 29 as determined pursuant to section 37.

    Division 4

    Variation in Authorized Marketing

Reclassi-fication of contracted export milk

 

40   If contracted export milk is delivered to a processor who does not deliver that milk, or an equivalent amount of milk or dairy product made from that amount of milk for export, that milk or the equivalent amount of milk is deemed to have been used by the processor as sub-class 1a milk and the processor must pay to the appropriate pool the price of that milk as sub-class 1a milk.

Contracted export milk audit

 

41(1)  For the purposes of ensuring that the requirements of the Alberta Milk Plan Regulation and this Regulation in respect of contracted export milk produced in Alberta are complied with, Alberta Milk or a person authorized by Alberta Milk may, during regular business hours and on reasonable notice, enter a processor's premises or any premises where a processor keeps records pertaining to contract export milk in order to inspect and audit the records.

(2)  Alberta Milk or person carrying out the inspection and audit under subsection (1) may make copies of the records and may temporarily remove the records from the premises for that purpose.

(3)  The processor must pay to Alberta Milk for the actual cost of the inspection and audit under subsection (1) in an amount determined by Alberta Milk.

(4)  The amount payable by a processor for an inspection and audit under subsection (1) and any interest is a debt due to Alberta Milk and may be recovered by legal action.

    Division 5

    Prohibitions

Purchasing below minimum price

 

42(1)  A processor shall not purchase regulated product for an amount that is less than the minimum price that is established by Alberta Milk or by the Alberta Energy and Utilities Board.

(2)  This section does not apply to contracted export milk.

Processed milk prohibition

 

43   A person shall not market any dairy product or agricultural product unless it falls within a class or sub-class described in section 27 or it is contracted export milk.

Substance removal prohibition

 

44   During or after the production or manufacture of fluid milk, no person shall, directly or indirectly or through another person, remove any substance from fluid milk, except milk fat or water.

Condition prohibition

 

45   A processor shall not demand, accept or offer or agree to accept from any producer any property, money or security as consideration for or as a condition of the purchase or agreement to purchase by the processor of any regulated product of or from the producer.

Licence required to market

 

46   Subject to the Alberta Milk Plan Regulation, no person shall market

    (a) regulated product produced in Alberta unless it is produced under a producer licence, or (b) a dairy product processed in Alberta unless it is processed under a processor licence.

Licence required

 

47(1)  No person shall produce regulated product unless the person holds a producer licence.

(2)  No person shall process regulated product or agricultural product unless the person holds a processor licence.

    PART 3

    EXPIRY AND COMING INTO FORCE

Expiry

 

48   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on February 28, 2008.

Coming into force

 

49   This Regulation comes into force on the coming into force of the Dairy Industry Omnibus Act, 2002.