PM to Announce Huge Mad Cow Aid Package

[rsomer]

Oops..."and now $550-$80 for calves" should be $55-$80 for calves.

[grassfarmer]

rsomer, As I see it the compensation has been paid out on money lost. The "basic breeding" herd has not been compensated because there has been no real loss incurred unless you sold off your cows. The accountant can argue the paper loss on these cows but as far as I can see the cow could be calving just now and hopefully her calf makes $850 in the fall - she is still worth as much as she was in 02 and in most cases feed costs have been reduced substantially this winter over last (by $200 perhaps?) which could make the cow a lot more profitable in 04.
Cull cows are the commodity we sell and they will be compensated as you say by @$300. Are you implying that 8% of the herd is only half the number most people cull annually? I thought the 8% was based on past years averages? If beef producers need to cull 16% of their cows annually they need to be looking at the breeding programs.
Calves sold last fall have not been compensated through this program because they lost less than the people holding them after December 23rd. In my book that is fair - I sold half in December and half in February and I will still do better off the December ones despite the $80 top up. You will be better off than all of us as you have a chance now of getting December prices and the $80 top up - can't be bad.
As far as blame goes your "in hindsight" comment about the Government's actions in 1997 says it all.
We would all have been wiser "in hindsight" what if these Canadians hadn't bought in UK animals? or the US guy in the Peace Country hadn't shipped that cow? It is no-ones fault certainly not the Canadian taxpayer and consumer who is already supporting us well despite packer profiteering.

[ALICIA]

Right after the announcement tonight, they talked about a meeting in the states on opening the boarder to live cattle in 2 weeks or so. (depending on how the talkes go)
I will believe it when it happens, but it did make me feel good for a few minutes.

[GrnAsMoss]

Johnboy555, congratulate those cattlemen, all their wine-ing at least got those big feedlots/packers some government subsidies, unlike those other meat producers who haven't squawcked enough to even register on the radar.

[rsomer]

grassfarmer: I appreciate your comments and I have no problem with your viewpoint. For myself, right now it looks like I will make more money backgrounding calves than any year since I began keeping computerized records. My feedlot enterprise will be profitable, my cow calf enterprise will definitely not show a profit. Still overall I am seeing some light at the end of the BSE tunnel. And I guess thanks to the government for some of that.
As for 15-16% cow cull, that is the industry average. In the past it was possible to cull a cow and replace her for little cost and cows that gave any trouble at all tended to be shipped. Depending on what evolves in the future that habit may have to change. Certainly we all are finding ways to keep cows that would have been gone before May 20.
I was frankly surprised, even shocked that there was no government assistance for the cow calf sector this time around or at least no significant government assistance for the cow calf sector. You are right that the people who sold weaned calves did better than those that kept their calves on the farm. That is not to say that the people who sold in the fall of 2003 were not impacted by BSE. They were to the tune of at least $250 a calf. It is like the government offering grain producers acreage payments for crop production because of drought or grasshoppers and giving barley/canola growers a per acre payment and wheat producers nothing. This time around I will end up on the receiving end of some BSE money so I am OK but I am not sure what message is being sent to the cow calf producer through all of this.
Although I am a smaller producer and I am expecting to receive a cheque I do have considerable uneasiness with the fact that the bulk of this money is not going to "producers" at all. If the prevailing industry speculation is correct, at least 60%-80% of the calves that this payout is based on are owned by the two packers or else American interests. I think that is a real issue for Canadian agriculture at this time, who should receive limited government assistance. If available funds cannot be targeted to Joe and Jane farm family then I doubt if there will long term support from the taxpaying public for assistance for agriculture such as we have seen.
The cow calf producer is left looking to CAIS for his/her BSE support but there are limitations to CAIS due to in many cases low reference margins, problems with improved inventories of feed and livestock affecting claim year margins, and cash flow restrictions due to delays in program payments. In any event it is obvious that the cow calf sector should not look for direct BSE funding from government. I think I am seeing a shift in government policy away from the family farm towards big agri-business and I am uncomfortable with that and the implications for the family farm in the future.

[pandiana]

I hear what you are saying and agree with this interpetation. My only problem is coming up with a better solution. How should the government have directed this money so that there would have been flow through up the chain instead of trickle down. Note, the operative word has been 'trickle'.

[rsomer]

During market failures, benefits are not distributed equitably throughout the marketplace. Government support, profits, losses will not work their way through to all market participants in the same fashion as if we had a functioning market. Governments have the capability to calculate the cost of BSE to the various sectors and could have chosen to compensate each sector according to its need.
However although it has been reported in the press that BSE has cost the Canadian industry $2 Billion the actual cost has been almost double that if you factor in losses to the cow calf sector and other commodities such as sheep and hogs. The $1.4 Billion in direct government support to date, although that is a huge amount of money, is not enough to spread around evenly to every market participant.
Policy decisions were made to support the feedlot sector which in all honesty was the sector most immediately threatened. Agriculture beyond the farm gate has become so intensive and is controlled by very few individuals, in Canada majority controlled by 30 feedlots and 2 packers, that this is a problem for the industry. When governments support agriculture, are we talking about Mom, Dad and the kids or are we supporting multi million dollar intensive sophisticated corporations and sometimes foreign owned multinational corporations that are beef producers too.
If the decision is to support the large intensive corporations the future of the family farm is doomed. How do governments decide? It is a policy decision, like taking the fork in the road, North or South. Governments decide by having a vision of agriculture in the future and by developing policies that achieve that vision. If we look objectively at the policy decisions that governments have been made to date we all can see which direction government is going on this one.