Last Monday, attorney Mike Warda read the below letter into the record at the PRB meeting:

PRB Hardship Hearing Talking Points

Article I of the QIP provides that a “‘Hardship’ means a challenge to the management and operation of a dairy due to the operation of this Plan.”

The PRB has applied hardships to assist quota holders but since October 2022 dozens of hardship petitions have been tabled, denied without consideration of their merits, or denied using an inappropriately restrictive standard invented by the PRB.  

The most dangerous reason this Board uses to deny financial hardship requests is advice from CDFA staff in a memo dated April 30, 2024.

The memo provides that (i) the PRB “bears a fiduciary obligation to the QIP’s financial health,” and (ii) that “Granting a hardship variance based solely on a diary’s financial performance falls short of fiduciary obligations.”

First, fiduciary obligations to a program is unfounded in law.

Second, if there is a fiduciary obligation it is to quota and non-quota holders.

If the the fiduciary obligation applies only to quota holders then every quota holder on the board has an irreconcilable conflict of interest.

If there is a fiduciary obligation, as this Board appears to admit, you are all in breach of that obligation.

PRB was supposed to be an advisory board.  But the members of this Board use their positions to continue the Program that benefits them financially while devasting their neighbors, friends and in some cases relatives.

To claim you have a fiduciary obligation to “the program” fees right into the claims of an AntiTrust Lawsuit for which the State of California may provide attorneys, but the State will not pay federally ordered restitution and damages.

You were here originally to protect the California Milk Consumer.  We all know that the Federal Order now does that, so you won’t approve financial hardships and you do nothing to protect the California Milk Consumer.  

Who do you serve, besides yourselves.  You continue to extend your own liability for unlawful acts.  You should grant every one of the financial hardships, (not just because it is right but it is in your own interests as FIDUCIARIES) unless you find the facts asserted in each request to be false financial representations.

The dairy industry in California is struggling. 

• The number of dairy operations has dropped sharply, from around 2,922 in 1997 to about 1,117 by 2022 (a 62% loss over 25 years), with further declines continuing. In 2024 alone, roughly 75 farms closed, following about 50 the prior year. Since 2002, three-quarters of family-scale dairies have disappeared. Average herd sizes have grown dramatically (from ~481 to ~1,511 cows), as larger operations absorb production while smaller ones exit.
• These effects are directly caused by the QIP.  The hardship petitions detail how these assessments are raising the costs of dairies and leading to consolidation and exit of small dairies.  Large quota-holding dairies are flourishing while family dairies struggle.  
• Regulatory and compliance costs have surged dramatically (reported increases of over 1,300-1,366% since the mid-2000s in some analyses), driven by stringent environmental rules, permitting complexities, methane emission reduction mandates, and other policies. These disproportionately burden smaller farms.

We ask you to grant the hardship petitions under the hardship definition in Article I of the QIP, the only legitimate standard under which the petitions should be evaluated.  Denying the petition is fundamentally unfair.  You have PRB members that have admitted that they could not remain viable without the quota payments; by the same token the non-quota holders cannot continue under the burden of the quota.