Open letter to cattle producers re: ALMS

[loric]

Re: An Open Letter to the Cattle Producers of Alberta
from Erik Butters, Chairman, ABP


Dear Cattle Producers:

The recent creation of the Alberta Livestock and Meat Strategy (ALMS) has brought the cattle industry of this province to a point of fundamental change, having, as it does, the inherent power to affect the lives of all cattle producers in Alberta. It is vital, therefore, that this change in industry governance and direction be the result of an open and honest collaborative process incorporating both industry and government input.

Since the announcement of the ALMS by Agriculture and Rural Development Minister George Groeneveld on June 5, 2008, Alberta Beef Producers’ directors, delegates and staff members, as well as many of our producers, have analyzed and discussed the strategy at length. ABP issued an initial reactions statement the day after the announcement and our delegates prepared and approved a first draft response to the strategy at our Semi-Annual General Meeting in Edmonton. In that response, delegates identified several key elements which they believed to be fundamental to any business and political partnership from which strategies like ALMS would normally issue. Those key elements are:

• A Shared Vision: Working together, beef producers and government must create an open environment that allows businesses to reach their full potential in a fair and competitive market.

• Role of Government: Working together, beef producers and government must ensure the development of a political, regulatory, and communicative environment which protects public health and safety; sustains the environment; promotes animal health and safety; and fosters education and the development of public knowledge in a manner that balances social and economic needs. Beef producers would like to stress to government that regulations must be based on appropriate management of real risks and an accurate analysis of the costs and benefits of these regulations.

• Industry Governance: Working together, beef producers and government must ensure that industry governance remains democratic and that it respects the rights of individual producers.

• Government Support: Working together, beef producers and government must ensure that government support for the beef industry comes from national programs that minimize the risk of trade actions and do not distort market forces or influence business decisions.

Given that the ALMS was not born out of such a working environment, ABP quite rightly has some fundamental concerns about it. Those concerns are that the strategy is not market driven; that it is not directed by democratically chosen producers; that it includes significant additions to regulatory costs; and that it creates duplication of jurisdiction among federal, provincial, and industry initiatives.

It is interesting to note that many of the priorities indentified in the ALMS are consistent with recommendations previously made by Alberta Beef Producers and, naturally we fully support those initiatives we previously advocated and which we continue to feel will make our industry more competitive. The Alberta Feed Grains Centre of Excellence is a welcome development that addresses our recommendation for improving the productivity of feed grains and forages. Alberta Beef Producers has strongly supported a reduction in the regulatory costs and barriers that affect our production systems and this issue is addressed in the ALMS. Both Alberta Beef Producers and the Canadian Cattlemen’s Association have repeatedly called for enhanced access to international markets and the development of more effective international trade negotiations.

Alberta Beef Producers and our producers welcome the fostering of market-driven branding and diversification initiatives. We support and encourage the Canadian Beef Advantage, a national Canadian Cattlemen’s Association and CCMDC branding initiative built on the value proposition of leadership in animal health and beef safety. The Canadian Beef Advantage is based on our identification system, tracing and tracking, and on-farm food safety attributes that would form a foundation for a wide range of private marketing ventures.

Alberta Beef Producers will be participating in the industry engagement workshops that the government is planning for the summer and fall, but input to the government must come from beyond these workshops and our organization. We have heard a number of significant concerns from producers about ALMS and we encourage them to engage in healthy public debate on issues which they find problematic.

Some of the key areas for debate will undoubtedly include:

A. The Alberta Livestock and Meat Agency (ALMA)
ABP understands that the ALMA will play a dominant role in the implementation of the Alberta Livestock and Meat Strategy and could become the major policy setting body for our industry. The Agency will have a board appointed by the Minister on the advice of a small selection committee; it will have a large budget of $56 million in its first year; and it likely will have similar annual budgets in the future. The government sees the ALMA as an industry-government partnership and has stated that it wants the industry to take ownership of the ALMA in the future. Therefore, some key issues requiring clarification would be:
• How will producers and the democratic organizations representing these producers be able to participate in the ALMA and provide direction to the distribution of funding?

• How will the government ensure that funding provided by ALMA does not unduly influence business and market decisions?

ABP also understands that the ALMA will include many elements incorporated into Meat and Livestock Australia (MLA), a producer-owned company which works in partnership with the Australian government, a processor-owned company, and an exporter-owned company. MLA is largely funded by transactional levies (check-offs) that are collected and disbursed by the Australian government. It also receives additional government funding for research and development work. The voting entitlement of producers in MLA is based upon the amount of transactional levies (check-off) paid, a situation which gives large producers many more votes than it gives to small producers. In Australia, producer organizations similar to Alberta Beef Producers and Alberta Cattle Feeders’ Association are designated as Peak Councils and provide advice to the government and MLA through the Red Meat Advisory Council. Therefore, some key issues requiring clarification would be:

• As the ALMA moves toward increasing industry ownership, how does the government propose to have industry contribute funding to it?

• How will the government address the desire of producers to have democratic representation on key industry organizations such as the ALMA?

• Will the government be requesting or requiring access to check-off funds for ALMA, who will pay these check-offs, and how will these funds be collected?

• How will the government ensure that the ALMA will be transparent and will represent industry interests?

B. The Alberta Livestock Information System (ALIS)
Please note– the name is currently being changed to Livestock Information System of Alberta (LISA)
The Alberta Livestock and Meat Strategy states that the ALIS/LISA will be a robust mandatory traceability system integrated into a broader, industry-managed information system. ALIS/LISA data will form the basis for the required age verification and traceability efforts and will include process/source verification and value added components. While age verification and premise identification will be required for all producers wishing to receive the second payment under the AFRP II in January, 2009, the government also has a proposed schedule for implementation of additional mandatory requirements, including animal movement, source verification, On-Farm Food Safety Verification, weaning date, vaccination/medication, and yield/grade information. As well, the ALIS/LISA will be the basis for voluntary bio-security, animal care, environmental stewardship, and brand attribute verification. Therefore, some key issues requiring clarification would be:

• Does the government have supportive data to show that the benefits created by the traceability system actually exceed the costs of implementing it?

• Who owns the data in the database, who has access to it, and what controls will producers have on who may access their data?

• Is there any evidence that the increased costs caused by the traceability system in some of our large markets will be offset by increased revenues in our other markets?

• If the significant extra costs of the traceability system do not create increased revenue through enhanced market access or added value, how will the government address the impact of this addition to the regulatory burden?

• Considering that much of the cost associated with the traceability system will be borne by cow/calf producers, how will the government ensure that these producers receive a share of any benefits generated by collecting and maintaining the information?

• How will the work of the ALIS/LISA be coordinated with the work being done by CCIA, a national, industry-led organization, and LIS, a provincial delegated authority of the Minister?

• How will the Alberta government create the legislative authority for the ALIS/LISA and how will it verify and enforce compliance with the mandatory requirements of ALIS/LISA?

C. Federal/Provincial Jurisdiction
There are many elements of the ALMS, including the use of Meat and Livestock Australia principles, which seem better suited to a national strategy than a provincial initiative. International trade negotiations, international market access, food safety standards, environmental stewardship verification, and many regulatory costs and barriers are all examples of areas noted in the ALMS that are entirely or largely the responsibility of a national government. Clearly, the ALMS will need a national focus and the support of all sectors of the livestock industry to be successful. Therefore, some key issues requiring clarification would be:

• How will the Alberta government ensure that there is national support for, and full industry cooperation with, the ALMS?

• How will the government ensure that the ALMA does not duplicate or worse, hinder the efforts of existing national trade and marketing organizations?

In closing, Alberta Beef Producers wishes to state that it is concerned about the government concentrating policy and financial influence in the ALMA. It is also concerned about use of force of law and financial incentives to drive adoption of marketing attributes such as age verification. ABP firmly believes that Alberta should work with our provincial counterparts across Canada to develop national solutions to national issues. Finally, ABP fully endorses the notion that major industry strategies must be developed in collaborations with the representatives of all producers.

We are entering a time of significant industry change during which producers must make informed and conscious decisions. ABP believes that, as the ALMS is rolled out over the coming months, clarity provided by the Alberta government on the issues raised in this letter would allow beef producers to make these vital decisions in a timely and effective manner. Fundamentally, however, ABP’s vision of the cattle business in Alberta is a market driven industry with democratic governance.
Alberta Beef Producers delegates have organized several producer meetings dealing with the ALMS and more meetings are planned. The Government of Alberta also intends to conduct a series of country meetings to provide information on the ALMS. The Alberta Beef Producers Board of Directors recently held a special meeting with the Deputy Minister and senior officials of Alberta Agriculture and Rural Development and the ALMA. At this meeting, there was a lengthy discussion about the ALMS and a number of the questions posed in this letter.

Alberta Beef Producers will be developing further information pieces and policies on the ALMS in the near future. These communiqués and policy statements will be shared with our producers and posted on our website at (www.albertabeef.org). For more information about both the ALMS and the ALMA please visit the Alberta Agriculture and Rural Development website at (http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/com12203).

Alberta Beef Producers thanks you in advance for your involvement and for your input.


Yours truly,

ALBERTA BEEF PRODUCERS



Erik Butters,
Chairman

[grassfarmer]

Well that was quite a long story - but I though rather short on content.
I think it carries throughout an inherent over estimate of the role of beef producers in the food production chain. It's all very well saying we must "develop with Government" policies that allow us to have flourishing businesses unrestrained by regulation. Don't kid yourselves that we are a hugely influencial part of society - we're not. In the real world Government has a hugely more important role - that of protecting the food safety of it's citizens. Cattle producers have always had to follow laws and rules set by Government here and around the world. The AMLS does not set a precedent, it is merely updating some practices that belong in the last century.

It seems clear the main problem the ABP really has with the AMLS is the perceived threat to it's current exclusive use of check-off funds.

Traceability is a non-issue in my mind, why waste time arguing whether the Government can provide figures to prove it cost effectiveness? It is the cost of doing business in the modern world - get over it. Many of our competitors around the world do it and we must also if we are to remain in the game. Arguing that we can go forward with a zero traceability system is like arguing we should revert to open range cattle production.. it just ain't going to happen.

It's also a waste of time berating the Alberta Government for implementing this program when it should have been a Federal or multi province program. Complain to the Feds or the other Provincial Governments for dragging their feet, you can't blame Alberta for going it alone that's the Alberta Advantage isn't it?

The funniest part of this letter are the complaints that this was not directed by "democratically chosen producers" (presumably that means ABP's non-democratically elected leadership) Rather rich coming from an organisation that was asked to join with the Ag minister and other producer groups in the B5 discussions. For whatever misguided reason it appears the sole contribution of ABP in these discussions was to thwart and sabotage any progress being made before ultimately stomping out of the group in the huff at the last minute like spoiled school children.
And then you bitch about not being allowed to steer Government policy? Seems you burned your own bridges there - permanently.

[farmers_son]

The letter is correct to point out that the ALMS represents a point of fundamental change, with the potential to affect the lives of all cattle producers in this province. It is not going to be business as usual if this goes ahead. The Province of Alberta is wanting to impose a regulatory system upon us that is more similar to what we see in Europe than what we have historically had in this country. And while we are told this will lead to sales to Asia I would point out that Europe is no longer an exporter of beef.

I acknowledge that there are differing views as to the amount of government involvement there should be in a “free market enterprise system” which we enjoy in this country. Still in my opinion that is quite a statement “I think it carries throughout an inherent over estimate of the role of beef producers in the food production chain.” In my view, it is still our industry, not the government’s industry. We are the ones who have made the investment, we are the ones doing the work. How can our role be overestimated or over emphasized? Where does George Groeneveld get off telling us what to do or else we can exit the industry? Maybe it is high time someone told George he can exit his industry and let us get on with doing what we do best; produce the best cattle and beef product in the world in spite of the Government of Alberta’s best efforts to screw it up.

[grassfarmer]

Farmers_son,Your implication that Europe is no longer an exporter of beef because of it's regulatory system is bogus. Europe is no longer an exporter because of it's huge population and shrinking land base available for pursuits like cattle rearing.
Yes, it may still be "our" industry because we are the ones owning the land, cattle etc but that doesn't mean we set the laws or rules by which the industry is governed. Does an owner/operator long haul truck driver set the rules for highway driving?? of course not - Government sets the rules and rightly so, agriculture is no different.
As I said before this is not a precedent. How about the day ear tagging with CCIA tags was introduced before animals could leave farm? wasn't that a day that changed the industry forever?

Trumpeting the old call that Alberta produces "the best cattle and beef product in the world....." is nothing other than a hollow boast from people that haven't traveled very far, or tasted beef in other countries very often. Without programs like AMLS realise that Alberta beef won't qualify for an increasing number of international markets because it doesn't reach the basic standards set for their beef imports. Without a workable traceability program you don't have a chance. If the head in the sand, back to the past, mentality is what passes for ABP leadership on this issue perhaps it's not George that should exit the industry but the ABP. Out of date, out of touch....out of time.

[per]

Grassfarmer you took the words right out of my post. I am thankful that the "Business as Usual" model going is be extinct. Moving toward a European tracing system is totally necessary especially if you were interested in on of the biggest opportunities in front of us, Europe! It might be pointed out that food and beef issues are not just the producers issues but they belong to everyone who eats as well. I'm not trying to be glib here, the consumer depends on Government to look after their best interests and to set policy and regulation. Grassfarmer points out correctly that when asked to fully participate on this very subject the ABP choose another route. I would be happy if my checkoff dollars went almost anywhere else after that display. On a personal note, I have consumed meat in several different countries and Grassfarmer is correct, we don't have a lock on the best beef in the world.

[Kathy]

There is only ONE producer (of cattle) in this business - and that is the cow. Whoever owns the COW is the only producer.

All the rest in the chain of control of these cattle are secondary processors of meat.

Our industry has been multiteered because raising the cow and the calf is hard work, that takes alot out of a family (in time and equity).

If we were more like the Brazilians and the Australians, we would not have to concern ourselves with the middlemen in our industry (the feedlots). The sad fact is, in Australia (for a good example) (personal knowledge from a group of Aussie boys in the country for some time)......

The one boys family has over 100,000 acres of land to raise 5,000 head of cattle and 12,000 head of sheep.

All this is controlled by and for the benefit of ONE family. Don`t go off the handle now, you bet they hire people to help them out (seasonal workers mostly).....

Until these Aussie boys came to Canada, they had never seen a calf-puller (and they attended agriculture schools down under). Their mother cows are on their own at calving time (survive with a smaller calf or die if its too big). Their animals are shipped off grass - no grain.

Now how can a Canadian ranching family compete with this - we can`t, unless we dramatically change our practices to be more like our southern counterparts.

The only way the Australians are able to survive is to be able to raise easy calving cattle (with small birth weight bulls)... on thousands of acres of land with little extra inputs. They do not tag their cattle at birth; they must list a beginning calving date. They round them up, when it is time, and see who made it through the calving season.

A successful manager will have the right cattle for the environment, cull the heck out of those that don`t work, and not worry about those cattle that get sick or having calving problems.

Keep costs low - reinforced by their comments that they do not treat their sick cattle with antibiotics (mostly due to the fact that they don`t feedlot them and confine them all together, like we do here).

Are Alberta ranchers prepared to be on parallel with this type of business regime. Are you going to watch over your herd of thousands with binoculars and helicopter, and count the survivers at shipping time.

Will you let them starve during the winter. Of course not! Raising cattle in Canada (even in different parts of Canada) is not the same as in Australia or Brazil, and we have to work with what we have.

Except something has happened over the last 50 years. People have forgotten that the land is the life-blood of the industry.

The control of the industry used to be in the hands of the ones that controlled the land, and we allowed this power to be taken away from us by those that controll the sales of meat.

Governments in an effort to allow our meat to sell to other countries, opened the doors to this cheaper meat from down under. Well, there is just no way to compete (price wise).

The Alberta Livestock Marketing Strategy has nothing to do with meat sales....IT IS A LAND GRAB. It is to be implemented under the AB Animal Health ACT (as yet unproclaimed, and illegal as it stands due to problems associated with what can and can`t be done via Acts and via Regulation);

The ALMS is designed to give the government full control of who can and can`t raise cattle. In other words, it also gives control of the land to the government.

All the best of ideas cannot compete with a consumer that is mostly concerned with price. All the strategies in the world, will not protect Canadian ranchers from having the border slammed shut in the event of a disease outbreak.

All the ALMS does is start a `fractionated` Canadian beef industry - breaking the Country into regions that will allow areas not physically associated with the disease outbreak, to continue to do business as usual, while the affected region is quarantined, bit by bit.

I guess this works OK for those that don`t fall into the affected zones; but, the new ALMS rules won`t just relate to disease - they will grant the Minister of Agriculture the right to force the licensing of ranching operations (how you run your business). As Mr. Groenveld stated, if you are unable or unwilling to cooperate with the strategy... you better get out of the business.

This is EXTORTION - no other way of putting it! Mafia gone main-stream. Government gone loco.

ALMS - is a land grab.

[grassfarmer]

Not everyone in Australia is on such a huge scale. The last figures I saw showed 60% of herds had less than 150 head.
How do we compete with Australia? well one way would be to capitalise on our advantages. The fact we are closer to our animals(and customers) in terms of distance than many producers in the southern hemisphere means we are better able to improve management and add value to what we produce, and get a premium from customers for that.... Hence the AMLS.
As to Aussie management - some of us in Canada are already managing our cattle along more natural lines - we don't pull calves, we don't calf in mid-winter, we fatten on grass and we virtually never use antibiotics.

[per]

All that fear and loathing can't be good for your health, Kathy. The low input grass fat or at least short keep back grounded model works for me as well. I throw out more antibiotics due to past due dates than is used. The vast majority of what is treated here is culled. Treated the first two foot rot cases in ten years this year. Both the cows and their calves will go down the road.

[farmers_son]

I said in my post that there are differing views on what is the correct amount of government involvement in a free enterprise system. And that is what this is all about. Is the new significantly higher amount of government involvement in the cattle industry that we are seeing with the Alberta Livestock and Meat Agency appropriate and necessary or not. Some will think it is and some will think this degree of government control is not for them. And no one should mistake for one minute that when government puts conditions on future government support payments that they are not exerting direct control over producers. How many of us can afford to turn down that cheque?

I do not intend to debate the merits of central planning. Suffice to say that some governments do use various degrees of central planning to manage important sectors of their economy. However I am flabbergasted that this government has chosen this degree of central planning for its livestock sector. A different government and it might have been expected. And I know that there are people within our industry that do look to the government to take a much larger role in our industry and to exert a much larger degree of control. I am not one of them.

I am very concerned that this new agency will exert a huge degree of control over producers. The Province is diverting hundreds of million dollars to this agency which will be controlled by a small group of central planners that only answer to George Groeneveld. Our cattle industry is not economically strong enough right now to resist that kind of economic clout. But I know that some will say that is exactly what we need and it seems that right now those people have the ear of government.

Anyone interested in the pros and cons of central planning by government can read:

http://en.wikipedia.org/wiki/Planned_economy

Producers should familiarize themselves with the benefits/disadvantages of central planning before they fall victim to the siren call of more government involvement in their industry. This should be required reading.

Some of the topics discussed are:
• 1 Advantages of economic planning
o 1.1 Stability
o 1.2 Conformance to a grand design
o 1.3 Meeting collective objectives by individual sacrifice
o 1.4 Comparison with capitalist corporations
• 2 Disadvantages of economic planning
o 2.1 Inefficient resource distribution — surplus and shortage
o 2.2 Cannot determine and prioritize social goods better than the market can
o 2.3 Lack of incentive for innovation
o 2.4 Infringement on individual freedoms
o 2.5 Suppression of Economic Democracy and Self-Management
o 2.6 Corruption
• 3 Economic Planning versus the Command Economy
• 4 Planned economies and socialism
• 5 Transition from a planned economy to a market economy
• 6 Transition from a market economy to a planned economy
o 6.1 Government market regulation
o 6.2 Corporate monopoly
o 6.3 Amalgamated trade unions
• 7 Similar economic models

[grassfarmer]

So is the argument central planning versus the chaos theory? The hints are there in your post farmers_son that the "free enterprise" system is non-functioning in the Canadian beef industry.
"How many of us can afford to turn down that cheque?" "Our cattle industry is not economically strong enough right now..."
You are right - over the last 5 years or so we have had an industry face ruin, with virtually no operation below packer level able to earn a return on capital and labor invested. Producer representative groups have been frozen into paralysis by being unable to co-operate with each other or to come up with a cohesive plan of any kind. The "herding cats" problem affects the majority of beef producers as it seems every one has a different idea but none are able to do anything radical under our "free enterprise" system because that system is an illusion. The cards are so loaded against primary beef producers by the corporate interests on the other side of the table from us and these corporate interests through monopolistic control do not suffer from the "herding cats" problem.

I think the time was right for Government intervention. Imagine a Government prepared to divert millions of dollars of taxpayer money into building a strong, unified, market focussed production and marketing body that might just give producers a chance at competing against the monopolistic corporations and world competitors on the beef export stage..... and producers oppose it? I think if the producers understood the vision behind this change they would welcome it. Too bad ABP is spending more checkoff money running a scare campaign based on highlighting small points that could be considered negatives rather than trying to promote the positives. All because ABP is in the huff at being deposed as the top cat among the squabbling cats that couldn't be herded.

[per]

I would think you would also be opposed to a mandatory non directional check-off fs.

[cowboss]

So this ALMS is going to open up new markets for our beef and capture more money for us producers. That would be great if the Alberta government actually had the ability to do that ....however international trade falls under the Federal governments mandate. The one problem with that is that as long as the Feds need central Canada's votes they refuse to bring supply management issues to the trade table and without that topic being open for discussion we will never get fair beef access in any trade deal (no matter how good our product is).

[wilagro]

cowboss: If supply management was eliminated, I am sure that it would not affect beef marketing one bit but we would have capitulated to the demands of the USA primarily with absolutely NO guarantees on the beef trade issue. I wouldn't trust them as they do not keep their word (a la the softwood lumber issue) and others.

Supply management has been a godsend for Canadian dairy, snd chicken producers.

[grassfarmer]

Cowboss, It took me a couple of reads before I followed your thinking on the supply management issue. Initially I thought you were condemning the Feds for not introducing supply management into the beef sector. Reading it again I guess you believe that by sacrificing supply management in the dairy and feather industry in Canada we will somehow gain market access to certain markets.
I do not believe this argument for a minute. If you do please tell me which countries would import extra Canadian beef tomorrow if we sacrifice the most successful sectors of Canadian agriculture (dairy and feather). I posed this very question to my ABP fall producer meeting last year and no-one could name a country, yet it is still trotted out as fact.
WTO talks are not about establishing "fair trade" and hence improving producers returns, they are about making it easier for multinational corporations to move product around the world. If that means importing x'000 tons of beef from Timbucktoo to Canada to hold down the market price here that is what they will do. WTO trade talks are not producer friendly. Look at the participants - Governments and Corporate heads greasing each others palms.

[cowboss]

The Feds completed a bi-lateral trade agreement with either Columbia or Peru last year ( I cann't remember which one but they are negotiating with the other country this year..hence my confussion). They refused to entertain any discussion about supply management issues and therefore Canada didn't receive trade equivalency (in grade, cuts or amount) with the USA and this is setting precedent, in beef trade, with the other countries in this region.
Beef has some of the highest trade tariffs on it as any commodity. Countries use these tariffs as trade barriers to protect their producers. I believe that if the WTO could of been able to lower these tariff levels, we would be able to realize a better bottom line.
There are alot of good points in the ALMS, but I don't see it doing everything (and being the only way to do things) that the Alta. govt does.