BELLEVILLE — In three separate battles, Ontario farmers are challenging the right of Dairy Farmers of Ontario (DFO) to control milk for export.

In the most recent case, Deseronto-area dairy farmer Tom Callahan is taking on the province, Dairy Farmers of Ontario and the Ontario Farm Products Marketing Commission to court in a class-action suit. He is demanding more than $1 million in damages for what he calls an "injustice" suffered by the province’s estimated 65 dairy farmers who don’t own quota.

Callahan says he is defending non-quota farmers, some of whom are on the verge of bankruptcy, and have been ordered by DFO to stop selling their milk.

In a third case, Bill Denby, a Sunderland producer, southwest of Peterborough, and three other milk producers have launched an appeal before the Farm Products Marketing Tribunal. Their lawyer, Don Good, will argue that DFO has the right to market milk domestically but that export milk is a federal matter and beyond the jurisdiction of provincial governments.

A win for any of the three would herald the biggest change in the industry since marketing boards came into place 35 years ago. A new industry would open the way for export milk, and the ubiquitous authority of milk marketing boards would be undermined.

Last December, the World Trade Organization (WTO) hammer came down hard on dairy producers selling on the export market. The WTO ruled that Canadian export milk was unfairly subsidized because producers who owned quota earned the lion’s share of their income from protected provincial markets.

Non-quota holders argue the ruling does not include them. They want to continue to sell their milk on export markets. Local producers, including 10 between Chesterville and Brockville, have been selling about 10,000 liters a day to the Barrie-based Georgian Bay Milk Company. The DFO has ordered them to stop.

"There isn’t any way that we are interfering with supply management," said Orline Pelton, a dairy farmer near Kemptville. "We are a group of strictly non-quota holders. No one shipping to Georgian Bay has quota."

DFO has become consumed by the current challenges and has an entirely different view of the issue. Chairman Gordon Coukell argues that the WTO ruling applies to all dairy farmers, including non-quota holders.

"We lost a trade challenge and Canada follows the rules," Coukell told Farmers Forum. He added that the Ontario Milk Act is not being revised to eliminate non-quota holders as critics have suggested. There was an exemption from the Milk Act for milk sold on the export exchange, he said. When Canada lost the trade challenge, to the United States and New Zealand "that exemption was gone."

Economist Al Mussell, of the agricultural George Morris Center think-tank in Guelph, says "The DFO has interpreted the Milk Act as implying they are the sole sellers of milk in the province." On the other hand, non quota holders say they have federal officials who agree they are complying with trade laws.

Officials at the Department of Foreign Affairs and International Trade indicated they will honor a provincial ruling in the matter, Mussell says. "Marketing boards have a lot at stake in this. I think everyone is watching this very closely. It’s a very critical precedent-setting case. My thought is that it falls on the shoulders of trade lawyers."

Callahan, originator of the class action suit, supplies milk to International Dairy Direct, operated by Bill Denby, and believes the DFO has exceeded its authority. "It needs to be corrected for the good of the industry. This is not an exclusive little club. This is an injustice."