Free Riding Lowers Market Returns 5-20%

[ASRG]

Again the question:
Why can't we designate on the livestock manifest which producer group we want our money to go to?
It is my personal belief the WSGA better represents my interests than the ABP or the CCA. The ABP position on the land grab bills is completely against my interests.....WSGA position reflects my interests.
The ABP refundable checkoff isn't so much about a free ride. It is more about why would you want to donate to an organization that has policies that harm you?

[forage]

I would be all in favor of a check on the manifest. I would also be interested in Numbers that are requesting check funds back. There is a confidentally in giving out a name and I am afraid that only the Board of Directors are privy to this information
and may be using it now and well in the future to discourage people from asking for their refund. I do remember a visit to my fathers ranch by a top dog from ABP requesting he rethink asking for his check off back and to continue supporting ABP. The simple answer he gave was when they stop wasting the money they do receive he would consider it. As if this was ever going to happen within the ABP organization. ABP has screwed me over ever since I started selling 4H steers and couldn't even vote at ABP elections and they continue to do so at every 4H show and sale. Of course on the other they do need the money to send the president D.S. on holiday trips just like others before him.

[MGMT]

Very interesting replies from all. I certainly thought it reasonable to suggest that 5-20% market price reduction was reasonable if the check off dollars were not there to deal with the potential threats to our industry. I am thinking how soon we forget the past challenges and how quickly we become complacent and comfortable.

So if producers have forgotten maybe they need to be reminded more often. We live in the information age, no need to be uninformed. Just Google eating beef is bad for you and see what comes up. Yahoo Answers asked the question is eating beef good or bad for your health. The answer that was rated as the best answer declared beef is bad for your health. Google World Cancer Research Fund and see what comes up. The World Cancer Research Fund has concluded that eating beef causes cancer and recommended no more than 500 grams or 18 ounces beef PER WEEK with no processed meats. And it goes on and on. Is there anyone out there that thinks messaging like that does not impact our market price for cattle? Do you just sit in your easy chair and as an industry do nothing to counter that kind of message? But to counter that message takes dollars. Why should some producers not have to support that effort? Is there any excuse to not pay their fair share that is really valid? I do not think so. If you raise cattle then you share in the benefits of the positive eat beef messaging that is funded by check off and you should not be asking for refunds.

What about international beef trade? It has not been two months since Canada’s success at the WTO regarding COOL yet not one poster here mentioned the COOL win as a benefit they received from their check off dollars. COOL was and still is costing producers cold hard cash on every animal they sell. That battle is not over yet. Granted the price of cattle is higher than in years past but COOL is still costing our industry. How much is hard to say but I have heard numbers in the range of $30 to $100 per head depending upon market demand. Why should producers like Grassfarmer and Forage be able to take their check off dollars back on some trumped up excuse such as Forage’s 4-H calf and not pay check off to support their and our industry? There will always be some excuse won’t there? There is no moral high ground, no logical reason to say someone else has to support the industry effort but they do not have to.

I found it strange no one mentioned the free rider problem as it relates to large producers, in particular feedlots. A refundable check off not only allows these large feedlots to shirk their financial responsibility to pay their fair share but gives them the economic might through potentially huge check off fund requests to extort policies that benefit their interest to the detriment of the typical cow calf producer. No. No concern about that. If and when those mega feedlots leave their $100,000 - $200,000 check off remain they expect something back personally. Instead someone that has 100 head thinks they can somehow use their refundable $200 check off to hold their provincial cattle association’s feet to the fire. What is being held to the fire is the competitiveness of Canada’s cattle industry.

Refundable check offs hurt Canada’s cattle industry.

[forage]

MGMT maybe just maybe the large feeders and feedlot owners feel the same way I do. I know I don't forget the past and I don't have a big easyboy chair like the president of ABP has as he sits and dreams how else he can screw over the cattle producers of the province. If I wanted anymore BS on the free ride I well go out and clean my bull pens.

[grassfarmer]

I do my own consumer education, indeed many
of my beef customers have started eating beef
again since they have access to products like
mine. Some of them quit eating beef because of
the growth hormone issue as well as overuse of
antibiotics in the commodity beef system. Why
should I fund an organization which wants to
force EU beef consumers to eat hormone treated
North American beef?
As for international trade, if the ABP claims that
all the positive things that have occurred in
recent years happened because of them they are
delusional. Sheer fantasy and you are fooling
no-one but yourselves.
As for the large feedlots and their influence on
ABP you seem to have that one back to front
from a cow-calf producer perspective. I used to
be a little uneasy with the extent of voice this
sector had within ABP. Since the levy change was
made they have up and left, taken their money
with them or so you always tell us. From my
point of view that's quite all right, if that money
goes to AB Cattle Feeders instead good luck to
them.
Lets all celebrate the "marketing freedom" we
have now that we have a choice of who to fund
with our checkoff levy.

[MGMT]

Funding our industry is not optional.

It would be delussional to say all the positive things that have led to higher cattle prices have been a result of check off dollars. The cattle industry has been and always will be led by market forces and market place demand. But that does not mean we as an industry can sit back and just let things happen to us.

We cannot take our industry for granted. We need to respond to the anti meat, anti agriculture message. We need to respond to the RCalfs that wish to block access to our North American market. We need to respond to government when it wants to dictate how our industry operates. We all need to respond and not let some carry the load while others find excuses as to why they should not.

[forage]

MGMT "We need to respond to government when it wants to dictate how our industry operates." Hard to respond when ABP has its head up the Alberta government's ass.

[forage]

MGMT you also stated in this thread "Sorry to disappoint. I am not duly elected to anything big or small. I understand some of the people posting here do have positions of responsibility within the industry however that would not be me. " Would it be you are a highly paid adm. for ABP would doesn't want to the free ride end.

[Happytrails]

MGMT you don't seem to be swaying many back to the non refundable side. Apparently a taste of freedom leads to a appetite for more.

Regarding the big cattle feeders taking THEIR money back just because they want to keep it I say we just get over it. I believe that ABP has historically been collecting around 2.5 checkoffs per head. If we lose all the feedlots we still get 1.5.

GF, in my world I can support the ABP and the refundable checkoff without contradiction. The proposal for publishing the refundees names is simply to deter those who would rather not feel the need to defend taking their money back. Having that information out in the open seems to me to be a healthier situation than having it ABP board confidential.

[grassfarmer]

HT, "...is simply to deter those who would rather
not feel the need to defend taking their money
back"
Thats sounds like intimidation to me. As you
said about the feedlot operators it is THEIR
money that is being refunded so why the need
to have to "defend" their actions to anybody?

[rkaiser]

I think you are right grassfarmer. there seems to be one guy posting under a number of code names here on agriville in some weird attempt to have us believe that the ABP/CCA free loader game is supported by more than one person...LOL ... At least one person with guts enough to make these ridiculous statements on agriville; which the current disguise, MGMT, is making.

We have all asked this question of your former aliases MGMT. Who are you???????? LOL

Fun and games ....

[MGMT]

I like to believe that I belong to a new generation of producers who have a vision of a competitive and profitable cattle industry. I invest in that industry in many ways. One way I invest in our industries future is through the check off. It is about the most cost effective investment I make. I think it is ridiculous that some people do not share the small cost of moving our industry forward.

The refundable check off system has two critical problems. One is the free rider problem. As long as people believe they do not have to shoulder their fair share then the overall ability to get the job done is diminished. As rents, wages, various costs such as communicating a positive message about beef to consumers increase then the check off will have to increase to compensate for the free riders refund requests. This will inevitably lead to even more refund requests as the remaining producers become increasingly frustrated at carrying the load while others do not. The other problem is the power to influence cattle industry policy that a few very large producers gain as a result of a refundable check off.

A refundable check off system is a ball of yarn that can only unwind to get smaller and smaller.

A non refundable check off is fair and treats everyone equally. Anyone can afford to invest $3 in their industry. And everyone needs to. We cannot take the work the check off is doing for granted or else the money will not be there when the next crisis or industry challenge arises.

[smcgrath76]

I think the issue with ABP and
refundable checkoff relates to the
choice not the voice.
Pretty well everyone readily agrees in
vestment in R & D is a good idea, pretty
well everyone agrees collective lobbying
of government is a good idea, pretty
well everyone agrees beef promotion is a
good idea. No one agrees on what we
should lobby for or how we should
approach things. That is the issue.
A collective effort is good as long as
there is consensus on the collective
gain.
I think the question is not whether
there is benefit from checkoff or the
need for a collective voice, the
question is does ABP have to be the
collective conduit and does the
structure/approach/function of ABP best
serve the collective need?

[GaryE]

There have been a lot of valid points raised on this thread. I have to agree with MGMNT on the need of a collective advertising campaign to counteract false accusations and discredit organizations such as PETA. Their also has to be a proactive advertising campaign endorsing the health benefits and environmental synergies provided by eating beef. I certainly don't think that ABP/CCA has the capability or desire to effectively mount that campaign. Their focus has been to spend millions on legal action towards reversing the decisions made by another sovereign nation. The WTO decision had no effect on our softwood lumber and will not have an effect on the purchase of higher priced beef. Look at the "win" over using implants and the results. The EU is still not buying implanted steers.
An agency that could deliver could be the new Canada Beef organization with a check-off directly from the packers from every animal slaughtered and also from every animal that is exported. Even though I am skeptical of the "trickle-down" aspects of profit from the packers, I am certain I will carry my full share of the costs. Today the cost of the RFID tag costs more than the packers are putting into the marketing equation....talk about a free rider.

[MGMT]

Smcgrath76 You are talking about a directional check off.

Please allow me to use this example. I am familiar with a number of professional organizations. I am speaking of professional organizations such as accountants, surveyors, engineers and architects. They all are established by provincial statute much the same as the various provincial cattle organizations that I am aware of. By law these professional organizations charge a membership fee. The membership fee is roughly equivalent to what a typical producer would pay for check off. These professional organizations are structured much the same as your typical provincial cattle organization. That is they have a democratic structure where the membership decide upon the direction of their professions. Resolutions are passed, board members are elected and so on.

If anyone suggested that somehow the professional membership fee should be directed elsewhere they would be laughed at. It is simply ludicrous. Now the members are free to join other organizations like the Chamber of Commerce or the Rotary. But the professional fees they pay are to fund the work of the organization that the province has established to represent their profession.

Where you might find a difference between the provincial cattle organizations and the professional organizations is the cattle organizations go to huge lengths to be democratic. Whether it is travelling ballot boxes, province wide meetings, elections, zone participation the producer driven cattle organizations such as ABP, SCA, BCA, MCP, OCA and the others walk the talk when it comes to democracy.

Another area where you would find a difference is the professionals speak with one voice. Even though there is often strong disagreement on issues that is very vocally debated at AGMs once the meeting is over the participants come out of the meeting and speak with one voice. Apparently cattle producers have not yet learned the absolute necessity of doing that.