Who will pay?

[dalek]

Cowman I have to agree with you at least partially. When you look at the cow-calf industry in our area, consumers could easily ask why they should support it when 70% or more of the farmers in the industry treat it as a hobby and have no intention of ever trying to make a living farming. Dairy is another story, but if it was only cull prices we could live with it in dairy.

[rsomer]

cowman: you said "If the cattle industry fails will it really matter to the Canadian consumer in the long run?"

Yes it matters. Consumer support has been behind the industry at least as far as purchasing our product goes and government support has been there for the feedlot sector up till now. Now the question is being asked why keep on providing support to the cattle industry when we could just purchase our beef from the United States, Australia, South America. It might appear to be cheaper to let the industry wither and die along with the talked about slaughter of the Canadian cow herd.

Agriculture does need to be able to justify its importance to the economy and the taxpayer/consumer. Perhaps some progress towards this end has been made because of BSE when the general public sees economic growth slowed in the second quarter due in part to BSE and the U.S. border closure. The cattle industry and primary agriculture is important to Canada and we need to be able to explain that.

The underlying economic strength of a nation is its primary resource industries. Canada is fortunate to have large forests, mineral reserves, water resources and hydroelectricity, oil and gas as well as a land base suitable for agriculture. The horsepower of a country's economic engine is measured by its gross domestic product, or GDP. In 1997, the agri-food industry accounted for 8.6% of Canada's GDP and represented about $100 billion worth of goods and services. Nearly 30% of the total came from primary agriculture.

Agriculture is important to the economy. Agricultural trade made an important contribution to Canada's trade surplus in 1997. Exports of agricultural and food products accounted for $21.5 billion, or 7.1% of all Canadian exports. Primary agriculture was a key component of the overall agri-food industry system, buying $14.5 billion worth of inputs such as seed, feed, and fertilizer, and providing $28.7 billion of basic products for the processing and retail industries and for exports.

Primary agriculture accounts for 62% of employment in all the resource industries. In 1996, approximately 2 million people were employed in a food-related job. This represents 14% of Canada's total employment.

Currently more than 51 million acres are being used for crop and livestock production in Alberta. This represents about 33 percent of the province's total land area. Approximately 27 million acres are in crops and summer fallow, 21 million acres are pasture, and four million acres are used for other agricultural production. Approximately 69,000 people are employed in primary agricultural production. The livestock sector is a cornerstone of the province's agriculture industry. Approximately 60 percent of Alberta's farm cash receipts come from livestock and livestock products. Alberta has the largest number of cattle and calves in Canada, with approximately 40 percent of the beef cow herd. More than 65 percent of Canada's beef cattle are finished in Alberta feedlots. In 2000, Alberta exported $5.1 billion in primary and processed agricultural and food products to 110 countries. This represents approximately 22 percent of Canada's total agri-food exports. Beef continues to be the major value-added product, with exports valued at $1.4 billion in 2000.

Yes, if the cattle industry fails it will matter in the long run.

[countryguy]

Cowman,I agree with you to an extent.It's just in this case the effects of this whole crisis reach MUCH farther than the primary producers involved.Just stop and think about all the people and everything in this country that this affects.I think we need a little help in the "whining"department from all these people to show the country just how big of an issue this really is!

[Bruce14]

Cowman, I realize you started this as a discussion starter but it goes much deeper than just beef.

Anyways, 3 short points.

1. It has been said dollar paid to the ag producer is flipped over seven times. Beef is definitley a value added product.

2. Who wants to have their food safety left in the hands of other countries (some of them 3 third world)?

3. We spend less take home pay on food than pretty well every other country in the world.

Sorry... one more while I am on my rant.

4. THERE SHOULD BE MORE NOBLE OR IMPORTANT PROFESSION THAN PRODUCING FOOD. Other than water, air and housing it is the only other basic necessity. If a wealthy country like Canada can't support agriculture and produce its own food maybe we need to reassess our priorities!

[kato]

Excellent rant! I agree completely.

Besides, when is the last time beef producers have whined for money? I don't recall getting any money from anyone for years now. We had support programs a long time ago, and gave them up ... to keep the American market. Heaven knows, we wouldn't want Uncle Sam mad at us would we? Who knows what might happen?

That's my sarcastic rant for the day.

[ValueChainFX]

Well everyone ... rant or no rant as usual ag issues are more complex than most! However I think we can all agree cowman just likes to point out some of those obvious questions people are going to ask sooner or later!

Cattle folks have always had government support ... the question is where does it go? How many government dollars go to the CCA, CBEF, feeder associations etc etc etc. Who pays for inspection services? These things are part of the industry foundations.

As a primary producer we need to be asking ourselves is money that is said to have gone into agriculture really going into agriculture? When the government spends money on a 14 million dollar incubator for product development, telling us this is for the agriculture industry, or untold dollars for export market development to companies like ... well the big guys. Is that money going to agriculture?

I have heard it said they could send 90% of the governments ag people on holiday for a year and most producers wouldn't miss them!

I guess at the end of the day, maybe our tax payers should know that really their money has not gone to support the primary producer it has gone to support big business again! The ones that are hurting the most (the primary producer) really has got next to nothing! I'm looking forward to someone pointing out to me they heard that someone somewhere really got a fair shake and the primary producer actually got some coins in their jeans! Or is the coin going to the feedlots, the packers, the marketers, the retails! Don't get me wrong here these folks are important to us as well, but there is something that smells more than a bunch of dead cows waiting to be buried!

Please correct me if I'm wrong, but very few producers will see any real benefit from these programs!

My apologies in advance I'm not trying to offend anyone, just looking for your thoughts!

[jensend]

What you've pointed out is that the only cure for this is the reopening of the border. The packers have had a huge windfall out of this as well as some of the retailers. Needless to say, the bureaucrats haven't been hurt a bit.

[cowman]

WOW, good response! I thought everyone was out combining!
I agree with everyone of you, but Bruce 14 hit it right on the head with his #4 response! It doesn't necessarily translate into dollars but it is the reason we do this silly thing called agriculture! So good rant Bruce...you hit a home run!

[rsomer]

Not combining yet...soon.

To see the other side of the issue, my wife who is an out of work school teacher might not agree with Bruce14 so enthusiastically. She and thousands of other teachers who have been laid off because of a lack of provincial funding for education might think that teaching is also a noble and important profession. And if there wasn’t so much money going to support a few feedlots leaving more money to be spent on the children of this province and country that it would be an improvement. Rutherford posed an excellent question, why should he as a taxpayer bail out the cattleman. Bruce14’s rant rings a bell with cattleman but does not explain to the average taxpayer why the cattle industry is important to their pocket book. In my earlier post I cut and pasted a lot of easily available information that is widely distributed but doesn’t really convince the taxpayer that agriculture is really important to them either. In Alberta the oil industry has been able to convince the consumer/taxpayer that a strong oil and gas industry is important whether because of job creation or adequate supplies as a remedy for high energy prices. Drilling activity makes the news on the TV station I watch. I don’t think agriculture and the cattle industry has been able to do the same. Yes, people still like cattlemen and the cow and calf in the pasture is a good warm fuzzy image but how does that image translate some meaning back to people in the city like Rutherford beyond the sympathy paid to the industry up till now. The taxpayer has many places they would like to see tax dollars spent, health care, education, roads, energy price relief. Agriculture needs to communicate its message that a viable ag industry is good for everyone. That to keep a viable industry will take government money in the short term. The message that Canadians spend less take home on food hasn’t really worked or Rutherford wouldn’t have felt the need to question why the cattle industry needs support at this time. In Calgary when the price of oil drops, people loose jobs. The BSE crisis has not really affected many jobs in Calgary. As long as food is cheap and as long as the city dweller's job isn't threatened the beef industry won’t be important to the taxpayer.

[kato]

I think the importance to the economy will probably show up when the economic indicators for the second half of this year are released. This will take a bit of time though.

The numbers they released last week already showed a hit to the economy. When you think about it, I believe the numbers were as of the first half of the year. This includes 23 weeks of "good times" (remember that prices were pretty decent before May 20), and only 6 weeks of "bad times". The next indicators will show a lot more weeks of "bad times"! If it shows up on the business news, then it will really exist in most peoples minds.

[15444]

Once the economists start reporting a major decline in the economy and attribute that, in a large part, to the BSE crisis, people's conclusions on the whole thing will turn around.

[ivbinconned]

Is agriculture important to the city folks? Let me just start counting the ways. In Sask. the average farm pays more than 4 times as much education tax as the urbanite and we get less, much less in the way of facilities, programs.
When I used to grow that malt barley and would take off a good crop it would amount to a gross of 25 to 30 thousand from a quarter. But then...when the finished product would hit the store shelf the Provincial and Federal goverments would step up and rake in....$1,250,000.00 plus in revenue from the crop off just one quarter! Do we contribute, yes, big time.
It would be great if in all ag products there was a free and open market ( free of gov. support) but that is something that has never been and never will be.
Since the time of Kings, food (grain etc) has always been used as a political tool to be used to manipulate something or some one.
But in this country when we have voices from the west advancing ideas like free markets, no subsidies etc, no supports etc. we have a federal goverment that says OK that is fine with us. Then lavishly supports agriculture in Quebec where it is clearly understood, that if the primary producer does well...everybody does well.
Sorry for the rant...must be the decafe she's got me on...

[cowman]

How does the federal government support agriculture"lavishly" in Quebec? Are they getting more than the rest of us? Or is it their own provincial government doing the supporting? I ask because I really have no clue...thought they got the shaft just like the rest of us!
I get a little worried when people start talking about "free markets". Free for who? Free for the little guy or the big corporations? If the whole world abandoned all trade barriers and eliminated all subsidies would we be better off? The primary producer and the consumer? Now I think Cargill and Safeway might be a whole lot better off but I doubt the farmer in Canada, USA, or Europe would be better off.
We tend to think if those Europeans and Americans would cut out their subsidies we would knock their socks off in the world marketplace...when in fact South America would probably knock us off!
This whole globalization thing is designed to take us all to the lowest common denominator while the profits roll in for big business. So do we want to have a standard of living like the peasants in Africa, South America, Asia? Living in a mud hut might be a bit uncomfortable in Alberta in January?

[cowman]

One other thing. If the federal government gave $700 for each cow they ran in the pit and they killed off 650,000 cows it works out to about $455 million. A lot of money but not a great amount...afterall they've blown a way more on things like gun control, bilingualism, the patronage scandal thing etc.
Of course it would cost a few bucks to dig the holes and they might have some trouble rounding up the guns and ammo!And of course there would be the paperwork, environmental studies,public relations and safety concerns. So it could sneak up to that one billion figure pretty easy or more depending on how silly they get!
Might be better to just give the farmer $700/cow and let him shoot her out in the back forty and let the coyotes handle all the paperwork?

[rsomer]

Cowman: The federal government provides transfer payments to Quebec even though it is a resource rich province. The Quebec provincial government takes some of this money and supports the agriculture industry in the province very well, I believe more than any other province although Alberta's farmers have received a lot of support from its government lately. As well the federal government is sensitive to the Quebec issue when developing ag programs for the rest of the country. Just so there is no bad mouthing about Quebec farmers, it was a farmer in Quebec who sent the load of hay we got last summer from Hay West. If another province wanted to support their industry to the same extent as Quebec I am sure those farmers would take the money too.

Your comments about South America and globalization are very insightful, right on. As farmers we believe we would be better off if government was out of the market place allowing us to operate in a "free market" but it is not so. Primary agriculture operates in a nearly pure competitive environment which might sound good but what that really means is that competition inevitably is driving all the profit out of the industry. Governments tend to provide what competitive advantage is available to agriculture in this country and all countries in the developed world. Without government support from the taxpayers in one form or another, all us farmers would not much better off than peasants in our own country, as you pointed out. Even in South America, for example Brazil, the governments supports agriculture but the nature of that support might be changing.

For some insight into government taxpayer support of Canada’s ag industry from another country's viewpoint see:
http://www.ers.usda.gov/briefing/canada/policy.htm

also the world situation at: http://www.ers.usda.gov/briefing/wto/