BEEF QUOTA SYSTEM

[coppertop]

I attended an Ag Service Board conference yesterday where a resolution was put forward to request that AARD, and Ag Canada investigate the feasibility of a quota system for Beef Cattle.
The resolution did not pass, in fact it was soundly defeated, but not before some very interesting debate.

One fellow requested to have an ABP delegate speak, and he gave some background on what prices were when barley was $4.00 a bushel in the mid 70's and cows were selling for .14cents etc.

Someone took a run at ABP, and of course that sparked even more debate ! The suggestion accompanying the resolution was the need to downsize our cowherd to 40% of it's current numbers, then I gather once we only had 40% of our herds left we would be required to purchase a quota. Nobody ventured to give an opinion on what we were supposed to do with all our marginal lands that are now used for pasture and forage.
One sure thing if the quota system ever got hold in Alberta we would not have to worry about packers, because they would not be in business, nor would our feedlots !!!

The poor fellow that spoke in favor of the resolution was, like most of us in the cattle business, very dejected and likely fed up with where the industry is headed, but, for those attending the meeting yesterday a quota system did not seem very appealing.

[Bez]

CT

Of course he was dejected.

But at least he had an idea.

Idiots do the same thing day after day and expect a different result.

This industry to a great extent is run by a few self serving folks who give a damn about most. And we seem to keep putting them into positions of power.

Time for some real changes.

Before anyone knocks the quota thought, I put forward the following items.

1. Only folks who consistently make money in ag are the dairy and poultry guys. They are under supply management.

We on the other hand are not - how many of us are driving a new vehicle every few years, a new tractor - oh, and let's not forget the fact that those dastardly dairy and poultry guys all seem to be able to afford permanent hired managers.

How many beef guys could do that?

Whether you want to or not, it is still a sign of profitability!!!!!

How much are you guys making on cows today? Or should I ask how much are you losing?

2. Lets see the damned quota sytem designed before we call it down.

I for one might be interested in it.

3. Test 100% and own the markets. Science or not - it is the consumers of the world, not the friggin politicians and scientists who drive our market. They want it, or it is a selling point - then who are we to complain? Just DO IT!

4. No packer owned cattle. I expect I will get called on this one by some.

5. No hormones - now we can sell to Europe. I am sure there are some who would want to call me an ass for that thought as well.

6. Close the Yank / Canuck border hard both ways.

Hell, if things do not change, there will be no one under the age of 60 raising cattle.

Sigh - I expect there will be no changes because it worked for Gramps - so it must be a good system.

Some folks actually believe that bullshitzen.

Obviously most of the folks at your meeting did - proves we will go no where until they are booted.

Regards

Bez

[grassfarmer]

Interesting post. I think as Bez says the problem is we will never get to the stage of seriously considering this as an option before it is dismissed. I would like to see some really out of the box thinking taking place before a proposal were even drawn up.
Points that will arise against it are easy enough to see:

1. It will be considered "anti free enterprise" by the likes of ABP/CCA which rather overlooks the fact that the corporate concentration in the retailing and processing industries are already very much "anti free enterprise" and the root of many of our troubles.

2. It will be said that we must give up exporting if we had supply managed beef (I assume this is where coppertops 40% comes in)I don't know if we would have to give up exporting though - so it would upset a few people at WTO, NAFTA etc but lets face it these groups sole aim is to facilitate corporate commodity trading around the world not to ensure producers survive. Who says we can't have a supply managed sector for domestic and also sell cheaper non-supported beef for export? We might be the first country in the world to do it but why not? Most other countries don't abide by NAFTA/WTO rules anyway - the US certainly doesn't. I think we should stand up the corporate bullyboys of "global trading" - they are ruining primary producers livliehoods on every continent and are a threat to global food security.


Things I like about supply managed beef might be:
1. It puts a body in place between the producer the processing/retailing giants that would ensure producers got a cost of production based return. Thus far I have seen no-one come up with any ideas how else to remedy this problem. Most commodity groups are still in denial about this even being a problem.

2. If our herds did reduce in #s (not neccesarily by or to 40%) it would be an opportunity to move back to a greener, solar driven production model instead of a fossil fuel one. We could still use most of the pasture and free up some grain land in the process. With a world population increasing all the time we cannot afford to feed cattle high grain rations when they could produce off grass/roughage equally.

The biggest challenge with this or any quota system would be initial allocation. Who gets it and why? Is there a means to allocate quota without it becoming a highly capitalised tradable commodity?

[farmers_son]

Free enterprise? Our present system is far from free enterprise, not even close. The free enterprise system cannot function and exist in the presence of monopolies.

Without a very substantial amount of government intervention not to mention financial support cattle production and agriculture in general could not exist within North America. It is not just a feature of agriculture in Canada.

Supply management....not going to happen. It is not 1970 anymore. Supply management were part and parcel of wage and price controls (which by the way Nixon and the U.S. put in place first and the U.S. has supply management too only it is called something else.) Government, in all the major economies, now has different ways to manage the economy. Today Government manages agriculture through subsidies and regulation not supply management. In the U.S. too as well as Canada. The U.S. is more creative, for instance subsidized bio energy.

[farmers_son]

On Supply management in the U.S...See:

http://findarticles.com/p/articles/mi_qa4051/is_200604/ai_n17172158

[silverback]

The biggest and oldest ranches in this country will demand the most quota, and who would be able to say they should not get it?

Then what do you suppose would happen over the next 40 years?

Those ranchers would just get bigger and bigger and bigger and the little guys will disappear faster than they are now.

This isn't the chicken industry where if you get a little more quota you build another barn on your 20 acre building site.

If you think you want another 100 pairs, you need the land to go with them. Who do you think is in the best position right now to buy up the quota/land from the 100 cow neighbor down the road?

Who are the biggest supporters of the way things are right now? The big guys maybe? Be careful what you wish for.

[Willowcreek]

Good post Bez...
If someone wants to study how a truly open and free market can/will operate without any restrictions in this day and age they only have to look at Russia a few years ago...

With the breakdown of the Soviet Union- Russia went strictly to an open market system- and since the concept was new to them, they had absolutely no laws governing or regulating it...

Within a couple years the entire system was controlled by the Russian Mafia and the Black Market- with low prices to producers- high markup/margins for the mafia/retailer- and exorbitant prices for the consumer (which they had to pay since the Mafia controlled almost 100% of the market)-- not that much unlike the current system the multinatiional Packer mafia is operating under- altho they still have some laws regulating some of their thievery!!!!

This forced the Russian government (at the behest of the populace) to bring back many of the old communist doctrines/laws just to break the hold the Russian Mafia/blackmarketeers were able to seize...

Nope-- those proponents of free markets in todays globalist world are just blowing smoke--as a truly free market won't work anymore with the globalist set up where many countries doing the trading and producing still are ruled by strongarm power, sweatshops, and serf labor forces...

[rkaiser]

So let's hear how this quota system would work. It may be fine to say that dairy farms are making some money but in our area the only ones who are dairy farmers are those who could afford to buy in to the system a few years back. No more 20 or even 50 cow dairy herds any more and as far as the family farm - well immigrant Dutch Families yes - smaller old family three generation farm families - very few. It may be argued that this second group simply took advantage of a personal opportunity to exit, but how does this situation explain the fight of most of us to keep the family farm strong and viable for the next generation.

It seems that shrinking numbers of actual families on the farm is the way of the future no matter which way we turn - supply managed or free market.

I for one still want to give the free market a chance. And by free market - I certainly do not mean the mafia style control that I agree with Willowcreek is part of the system right now.

I believe that society is shifting away from globalism and even though we may be on the cutting edge and it may take more than our careers to instill change --- we are responsible to future generations to do the best we can.

Foreign investment and global economics will not be stopped, however laws governing control by a few can and will change.

Good Sunday morning everyone and keep up the good battle.

[coppertop]

Excellent discussion, which I knew would take place when I posted this topic.
One thing that was lacking with the resolution at the ASB conference, was some clear suggestions on possible outcomes if we decided to move toward a Quota System.

Years ago, long term poultry producers were grandfathered into the supply management system without having to purchase a quota, this info came from a past chair of the Turkey Marketing Board, but I suspect anyone wishing to have a quota in the Beef business would be required to purchase it.

I would suspect the incentive for younger producers to get into or stay in the beef industry in a quota system would be extremely slim. Getting set up in a beef operation is tough enough without buying a quota as well.

I suspect that this same resolution may appear at the Provincial ASB Convention in January even if it did not get support at the regional conference. If, in fact, it does get moved from the floor of the provincial convention, I am willing to bet that the debate will be a lot more heated,but the outcome will likely be the same.

[Bez]

The point is I have offered 5-6 options that will be entirely discounted before they are even developed - or thoroughly thought through by those in power. Put any three into action and we have a chance. Do nothing and we continue at the mercy of others.

Producers talk independence - I would actually like to see some for once.

It shows we are doomed to mediocrity simply because Gramps way worked for him - so it must be ok for us.

What other group has even gonne so far as to do this - usually they just ask for more government handouts.

That is why I have no truck with producer orgs other than to own a membership.

They are beyond help with their low brow, non-idea, let's stay the course thought process. Other than beg for support money from the public.

GF - Anti free trade? Only a fool would think the beef industry is free trade. It is so controlled the average producer is a price taker. What hardware store owner would ever get a job so he could support his store? What hardware store owner would sell product at a loss? How many hardware store owners are sucking the government support tits - or whining about how tough it is or begging for money on an annual basis?

Then compare ag - all but the "quota" guys are begging to the point it becomes old news. As it was put to me in a western city not long ago - "All you ag guys do is bitch about how tough it is. Get a job!"

We have lost the general support of most voters - from coast to coast. They hate payng their taxes as well. Despite the booming Canuck economy, the average Canuck worker has not seen a real increase in life style. And they are tired of hearing from us. They are concerned about us producing their food, but they do not want to provide tax dollars. I know the response to give them, but the taxpayer does not care.

SB - Who cares how much they get? As for dairy and poultry - there are new start ups. Is it tough? You bet - so be it. Life is going to get tougher too - the OPEC boys just met to dump the US dollar. Only one country is in disagreement - Saudi Arabia. When China joins in there will be seious probs for anyone in this country in the ag game. You ain't seen nothing yet.You are going to see a lot of your friends go down over the next few years and no one under the age of 50 coming in unless they come in under the family support network. No different in the quota groups now.

Kaiser - The only one who actually asked the question. Why am I not surprized. I do not know the answer - but before I would EVER discount it I would like to know more about it. It works for some groups - why not ours?

What about the other options? No one interested?

In the end nothing will change and certainly the other options I mentions will never get off the floor - proving to me that there is no such thing as free enterpise in our industry.

I am sure I will see the same response here as I would at any producer meeting.

No one wants to get out there and demand some damned real alternative action from their reps.

Bez