The initiative will now allow new producers to receive two kilograms of quota for every kilogram of purchased quota
Alberta Milk is launching a program to assist new dairy producers to get into the business and partially offset the cost of buying quota.
The New Producer Assistance Program (NPAP) builds on a previous Alberta Milk program that loaned new dairy farmers quotas of 25 kilograms per day, which would be repaid by purchased quota over a 20-year period.
“The expectation was that you would buy replacement quota after 10 years of being in the program,” said Jonathan Ntoni, Alberta Milk policy analyst. “But how things are in the industry now, we understand this is a difficult thing to do.”
The program will allow new dairy farmers to receive two kilograms of quota from Alberta Milk for every kilogram of purchased quota, which will allow for an additional 25 to 30 additional cows.
Ntoni said the demand on the quota exchange is seeing prices around $50,000 a kilogram.
Limited availability of purchased quota precipitated the move to the NPAP, which will allow those accepted into the program to keep the initial loan, said Ntoni, as long as they stay within the limits of the initiative.
Those conditions include having up to 75 kg per day of purchased quota for the first five years followed by 120 kg per day of purchased quota after five years.
“The board took a look at the program and said we’re going to improve it because the program is designed to help those who are passionate and knowledgeable about the industry and wish to start their own farm,” said Ntoni. “The program is also designed for such people (to) become dairy producers so instead of clawing back after 10 years, the board decided to let successful applicants keep the quota for life.”
Ntoni said the changes to the program came after consultations with producers and stakeholders to find out how to make it viable and sustainable.
Another change he highlighted was the ability to use a family transfer of quota.
“Instead of buying the quota, you can come in with family transfer quota to establish a new farm. It has to be a new farm, and then receive the extra help from Alberta Milk,” he said.
Up to three applicants per year will be accepted into the program. Applicants must go through an initial screening before developing a full application. Applicants will also be required to attend an in-depth orientation session.
More information on the NPAP can be found on the Alberta Milk website or by phoning 877-361-1231.
Source: Western Producer