Free Riding Lowers Market Returns 5-20%

[smcgrath76]

MGMT - I am a member of one such
professional organization. In the past
I was a voluntary member and received
what I felt was great benefit. Now I am
a member because by law I have to be and
I consider it a complete and total waste
of my money. There is no longer any
value to me and certainly 0
accountability as the accountability for
the organization is set in regulation by
government, not by the membership.
I agree in principle with a common pool
of $ for use in pursuit of common
interests (non-directional), but I am
not certain how we make the unilateral
decision that ABP in its' current
state/structure should administer that
common pool of resources. The issue of
the best place to administer this common
good is what created ALMA in AB, create
SCA in SK, resulted in voluntary
checkoff in AB, etc. The issue is not
going away, but the discussion is not an
open and shut case of non-refundable
checkoff going directly to ABP no
questions asked.

[smcgrath76]

Forgot to add, most other provinces have a
refundable checkoff.

[grassfarmer]

MGMT, If only ABP had walked the talk when it came
to democracy. The main reason they find
themselves in their current predicament is that they
run roughshod over democracy for too long. Too
many years of producer meetings where resolutions
were made and passed by ranchers only to vanish
and never see the light of day at the AGM. Or the
ones that did be unanimously voted down by the
directors, despite the same directors having backed
the resolutions out at their zone meetings. A lot of
similarities to the Alberta land grab bills - ABP has
long been controlled by their "cabinet room" instead
of being a true voice of producers. No wonder they
support the land grabs - like minded "communist
conservatives"

I find it ironic that this whole ABP stance runs so
contra to the commonly stated Alberta values.
Where is the freedom to choose? the individualism
this industry and province supposedly runs on? This
is nothing but a goddam union under another name
- insisting that all the "employees" must pay in.

I'd really like to hear farmers_son take on all this as
he seemed to be quite a supporter of AB/CCA but
has been unusually absent from this thread.

[MGMT]

Smcgrath76. Yes. The only province remaining with a non refundable check off is Ontario. The free rider problem exists there too.

I think I know the professional organization you refer to and I pretty much agree. Just the same, wasn’t the change a majority decision of the membership? As such shouldn’t the decision be respected?

I am not sure I am getting your point. In Alberta, ABP was established in 1969 at the request of five widely diverse farm groups (the Alberta Cattle Breeders Association, Alberta Dairymen’s Association, Alberta Federation of Agriculture, Farmers Union of Alberta and the Western Stock Growers’ Association. In Alberta all the check off collecting commissions or boards work much the same way.

Are you referring to how the government changed the check off from non refundable to refundable without a producer referendum? That was undemocratic and should never have happened.

Grassfarmer. I have read these threads long enough to know you have a problem with your resolutions being defeated. There is never a guarantee that a resolution passed at the local level will go on at the provincial level. And within ABP the “board” is made up of elected producers. The board needs to make decisions. Everything can’t be decided at an AGM. That is how democracy works.

[MGMT]

I should have said the free rider problem exists in the other provinces with a refundable check off. You would not see it in Ontario.

[grassfarmer]

"The board needs to make decisions...... That is how
democracy works." Or DOESN'T work in this case -
same with the AB Land grab laws.

I happened to read this posting on another forum
today where a similar discussion is going on about
checkoff levy in Kentucky. Thought it was rather
fitting.

"What is a checkoff, but a committee financed by all
to pass on the views of those already in power?"

[smcgrath76]

MGMT - On the first organization - I
don't recall ever getting a chance to
vote. An act was changed and so was the
organization. It is now focused on
serving the oil industry (particularly
reclamation).

Perhaps my take was confusing. I think
the issue that ABP ran into when it hit
the crossroads a few years ago was to
honestly address the questions of
whether the organization was still
relevant, or if many of its
procedures/positions/processes were
outdated. They did try to go through an
assessment of sorts, but producers are
not exactly known as being incredibly
open to change. At that point it is a
question of should things be
restructured or restarted. I think that
is the crux of the debate.
The challenge of democracy is that the
apathy of the many is often trumped by
the tyranny of the few.
One thing I would like to see is that
anyone who requests a refund lose the
right to serve as a director and
possibly the right to vote, but managing
that would be an office nightmare.

[per]

"One thing I would like to see is that
anyone who requests a refund lose the
right to serve as a director and
possibly the right to vote"

Not much of a deterrent.

That's an interesting perspective. It appears to me that in a non directional refund world you are a member in good standing while the ABP has your money until you have received it back. Not likely is there ever a time when a refunder is not a member at least for long.

As far a free riding goes, some of the so called free riders invest much more than the sum of their check off refund into the industry. Hardly free.

MGMT, what was the original mandate of the Cattle Commission?

[Happytrails]

This is an interesting discussion that I am glad to see taking place. A couple (OK 3) points.

1. The checkoff is only 2/3 refundable. So nobody is free riding, just riding cheaper.

2. MGMT, you say that making the checkoff refundable was undemocratic. I would have to disagree. I wasn't there in 1969 but have it on good authority that the Western Stockgrowers only agreed to a non refundable checkoff because of strong pressure from the other organizations. Many stockgrowers regretted caving on that principle. BTW the checkoff was 10 cents a head back then.

3. It is likely a bit of a stretch but the ABP board acted a little like the former CWB in dealing with change. Instead accepting their new reality they both spent too much energy fighting it. And I agree with Sean that there should be ways to reward those who of us who put their money into our industry.

[forage]

Read a very interesting article in Grass Routes, front page has a direct message as if MGMT wrote it himself.

[ASRG]

Would that be Rick Smith?

[forage]

Yes , he is the executive director of ABP and R.Kaiser he did state he was not a "elected" offical but he is a paid puppet

[farmers_son]

Please, I have no connection to ABP. I am here because I see a real need for ordinary producers to speak up for our industry. That is all. When Minister Groeneveld made the check offs (beef, pork, lamb, potatoes) refundable it impacted those commissions ability to further their respective industries interests. That should have concerned everyone and I know for certain it concerns me.

GaryE. Thanks for the support. Best be careful or they will accuse you of being someone you are not.

Per: That is before my time. I am sure the original mandate has expanded. Back in the day the Canadian cattle industry barely produced enough for domestic demand. Now Canada is one of the worlds largest exporters of grain fed beef. Back in the day animal rights and anti meat lobbies were non existent. Now they are a well financed and influential force to be reckoned with. It is always nice to recall the good old days but we do live in the here and now. As such we have to deal with and find solutions to today issues. That includes having the money to defend and promote our industry.

Happytrails. Yes it is cheaper for those that ask for refunds. Really, was $3 per head so expensive? Seriously? If there is regret today about the check off then lets have a referendum on it. I can point out in this thread the need for a non refundable check off and certainly others in this thread will point out the disadvantages of it but at some point shouldn’t the producers decide on the future of their industry? It is still the producers industry. Recall the producers had a referendum on the check off some years ago and supported it. Then the government went against the majority of producers (yes it was a narrow majority) and took away needed industry funding. That was a wrong that needs to be made right. That should have been the producer’s decision.

Smcgrath17. “The challenge of democracy is that the apathy of the many is often trumped by the tyranny of the few.” The reality is when it comes to getting things done it often falls to the few. Even it is only a local hall project a committee gets formed to get it done. Is that a tyranny or is it leadership? I guess it is a glass half full or empty kind of thing. Really it is democracy and unless you have lived in a country with real tyranny then I doubt if any of us can appreciate what tyranny is. We take our democratic institutions for granted quite often.

Let’s face it. Government could do everything our provincial cattle organizations do for us and we would not have to pay any check off. Take ALMA for instance. ALMA is a technocracy made up of government appointees some of whom are well known for only furthering their own interests. No producer elected those people. But they are making decisions that affect producers directly. ALMA could do it all and would do it all for free.

Or alternatively, producers take charge of their industry through democratic elections and chart their own path. However this course means producers have to fund the effort. The choice is clear. If producers are not willing to fund their industry government has already indicated its eagerness to take over. The timing of the government mandate to make the check off refundable and the startup of ALMA was not coincidental. Government knows the refundable check off will weaken our ability to defend and promote our own industry.

I think it is up to us. It should be our decision. Let’s make it our decision through a referendum on a non refundable $3 per head check off. Let send a message to Government and ALMA that we want to be in charge of our own industry.

[smcgrath76]

FS - What I intended to point out with
my comment was not that the leaders of
ABP are tyrannical. Rather that the
problem is no one is engaged unless they
have a major problem. The turnout at
ABP meetings is a lot better when
everyone is mad or scared or someone has
an axe to grind. ABP is not very sexy
when you are talking about proactive
problem avoidance or problem solving
before the emergency.
To be fair I think the people that
contribute time and effort to ABP (or
other organizations) should be
applauded, rather than accosted, and I
have great respect for the staff of the
organization.
I do however think that the structure of
ABP is ineffective, but that may say as
much about the membership as the
leadership. I also think that the
organization needs to take a serious
look at who and how it is serving and
what services it is offering. ABP tends
to have a different viewpoint of the
industry than I do on many issues, and
the question of status quo and
protecting equity/position vs. growth
and innovation is one that I don't feel
is being very well addressed.
To be completely honest I am not sure
that without the US next door our beef
would really be in great demand, unless
someone can explain to me why it is such
a great product and what we have done to
back up that claim. That is the area I
think we need to be working on.

[ASRG]

I think my question remains? Is MGMT really Rick Smith? Forage says "yes"....is he right?