Just when some of us in BIG C thought we were having little or no effect, ABP has come out with a new approach to settle the BSE testing resolution. A "Backgrounder" has been released to the delegates 5 days prior to the meeting which leans toward the directors stand of not supporting Voluntary BSE testing for market access. I do say leans, as the paper does include a few points in support of testing which are quite quickly explained as futile.Last years meeting saw a shorter version set in front of the delegates just prior to the vote.
This paper conveniently leaves out any points pertaining to potentially stopping, or at least curbing the captive market for OTM's, and points to science that is quickly becoming past history repeatedly.
Since the paper was produced to stimulate discussion, I have taken the liberty of posting it here on Agriville. Please comment, as this resolution will make the floor at the AGM and will finally be given the respect it has deserved for three years now.
VOLUNTARY BSE TESTING
Backgrounder
Since Canada discovered its first case of BSE in May 2003, voluntary BSE testing has been a subject of debate. While many factors around voluntary testing are unknown, we do know certain things. This backgrounder is intended to provide ABP delegates with factual information and questions to consider in discussing voluntary testing.
This backgrounder looks at the relationship between voluntary testing and market access, voluntary testing as market strategy, and voluntary testing and public perceptions.
Testing and Market Access
Regaining access to foreign markets involves government level negotiations on regulations and import protocols. Industry in both the exporting and importing countries can add input to the process but in the end governments regulate imports and the final decisions on import regulations will rest with the importing country government.
According to Foreign Affairs and International Trade Canada, no nation has requested that Canada test for BSE as a pre-condition of gaining access.
The World Organization for Animal Health (OIE) does not recommend testing as a market access condition or as a food safety measure (http://www.oie.int/eng/normes/mcode/en_chapitre_2.3.13.htm).
According to Peter Kuperis, Senior Trade Policy Analyst with AAFRD, under World Trade Organization (WTO) rules, imported and domestically produced “like products” must receive the same treatment. Given this requirement, a nation would risk breaking WTO rules if it required testing of imported beef from only one BSE-affected country. If the importing country has found BSE in its domestic herd, it would also need to test its own beef before imposing testing on imported beef. Japan’s current import regulations comply with these general WTO rules.
Nations may have one regulation for all imported beef or they may have different regulations for different countries according to their disease status. According to Peter Kuperis, an offer by Canada to allow voluntary testing would be difficult for an importing country to respond to. Under what conditions will it allow entry of this voluntarily tested Canadian beef?
South Korea is a good example. South Korea currently bans all imports of all types of beef from Canada. If Canada requested access for OTM beef from plants doing voluntary BSE testing how should South Korea respond? In order to allow such beef in, the ban on all imports from Canada must be lifted or changed. Should Korea only lift it for tested OTM beef, in essence imposing testing on all Canadian OTM exports to South Korea? How would South Korea justify imposing testing on Canada but not on other BSE affected trading partners? Or should South Korea impose testing on OTM beef from all BSE affected countries? Should it lift the ban on all Canadian OTM beef?
Proponents of voluntary testing point out that until the question is asked no one really knows how importing country authorities will respond.
Using testing as a “bargaining chip” in market access would be a substantial change from Canada’s approach of relying on international scientific consensus and World Organization for Animal Health (OIE) guidelines to establish import protocols.
Canada has agreed to protocols for exporting hormone free beef to the European Union (EU) even though the WTO has ruled that the EU’s ban on beef from hormone treated cattle violates international trade rules.
The Canadian Food Inspection Agency (CFIA) does not have an official policy regarding voluntary testing. According to Darcy Undseth, Veterinary Program Specialist-BSE, of the CFIA, developing a policy on voluntary testing would involve Agriculture and Agri-Food Canada, Health Canada and Provincial governments. The CFIA has discussed testing with the Beef Value Chain Roundtable (a beef industry/Federal Government advisory group) but no consensus has been developed, except for the use of testing in the event of a catastrophic market loss.
Questions
If Canada agrees to voluntary testing for one country will other nations demand it?
Would offering voluntary testing as a way to improve or expand market access set a new and costly standard (e.g. Canadian beef must be tested while U.S. beef is not)?
Would allowing voluntary testing affect progress on the rule to allow OTM beef and cattle into the U.S.?
How will test results from voluntary plant testing be used in our BSE surveillance program?
Who would announce a positive result from a testing plant? Who will certify the accuracy and reliability of plant tests?
Would allowing voluntary testing raise interest among importers and consumers in some markets and increase pressure on their governments to open to Canadian beef?
Voluntary Testing as a Market Strategy
Any discussion of a marketing strategy will be speculative since no one can know for certain how consumers or markets will react until the strategy is tried. There are, however, some facts about testing that can help this discussion.
According to Tony Martinez, President of Rancher’s Beef, the cost to test for BSE would be approximately $20-$25 per head based on 800 tests per day. This estimate covers all costs for the test strips, staff and the container lab needed to conduct the tests. This estimate does not include possible segregation and tracking costs that may result from any CFIA testing protocol.
Rancher’s Beef has expressed interest in voluntary testing and is prepared to pursue it as a marketing strategy. Rancher’s Beef did not have success in persuading governments to allow voluntary testing. Rancher’s Beef is still interested in testing as a business opportunity but is not prepared to further pursue the issue with governments at this time.
Rancher’s Beef sees voluntary testing of non-age verified animals as a way to add value to the product and offset the increased inspection costs associated with SRM removal.
Rancher’s Beef has strong indications form Japanese import companies that they would buy tested Canadian beef it was available but the Japanese government has not made a formal request for testing to any exporting country.
Japanese industry association officials have indicated to the Canada Beef Export Federation that Canada is not reliably supplying beef from under 20 month animals and that the beef from these animals does not have the marbling required by Japanese consumers. These same Japanese industry association officials also indicated that voluntary BSE testing of over 21 month animals (and animals whose age can not be verified) would qualify a much larger number of carcasses for the Japanese market and would increase the saleability/value of this product in Japan. A similar message was delivered in August 2006 by the Executive Director of the Japan Meat Traders' Association at an industry meeting in Alberta.
Other products have developed niche markets using health or certification attributes that are not required by government (e.g. organic food, natural beef).
Foreign Affairs and International Trade Canada is not aware of any country that has used voluntary testing as a market access or product differentiation strategy.
Prior to 2003, most of Canada’s OTM beef was exported to the United States. According to Statistics Canada, 90% of Canadian beef exports in 2002 went to the U.S. This is likely to be the case again when the U.S. opens to OTM beef and cattle. (http://www.statcan.ca/english/research/11-621-MIE/11-621-MIE2003005.htm).
It is reasonable to assume that Australian 85 % lean beef would be the main competitor/substitute for BSE-tested Canadian beef in many offshore markets. Since May 2003, the price of Australian lean beef in Canada has ranged from $1.37/lb to $1.56/lb. The current price is $1.45/lb which is similar to the current 85% lean Canadian product price (Source; CanFax).
Canada has developed an animal identification system that will allow it to use age verification and other product tracking capabilities to differentiate its beef.
Questions?
How much extra value would voluntary testing add to OTM beef?
Would the number of plants currently interested in voluntary testing slaughter enough cattle to affect general price levels?
Japan appears to be the only market being considered for voluntary testing. Is this market lucrative enough to justify the potential risks of testing?
If voluntary BSE testing is a successful strategy how easily can our competitors adopt it?
Voluntary Testing and Public Perception
Consumer confidence in beef remains high in Canada. Quarterly polling by Ipsos Reid consistently finds that 88% of Canadian consumers give beef a safety rating of 5 or greater on a scale of 1 to 10.
Government and industry have consistently stated that Canada’s BSE safeguards (SRM removal, feed ban, surveillance) result in a safe product for consumers.
The only countries that have used extensive BSE testing, outside of a surveillance program, are the EU and Japan. In both cases authorities stated that the testing was done to restore lost consumer confidence. Japan has stopped requiring mandatory testing of slaughter animals under 20 months of age.
Questions
How would Canadians react to hearing that plants are testing for export markets but aren’t required to test for the domestic market?
Will plants testing for export markets also advertise and sell tested beef domestically? How would this affect the domestic market?
Would testing only certain cattle (e.g. OTM) create the impression that beef from this particular class of cattle is less safe? Or that non-tested OTM is less safe?
How will major domestic UTM beef buyers react?
Information Sources:
Beef Information Centre
Geoff Adams, Foreign Affairs and International Trade Canada
Canada Beef Export Federation
CanFax
Peter Kuperis, Alberta Agriculture, Food and Rural Development
Prionics Ag.
Tony Martinez, Rancher’s Beef
Statistics and Data Development Unit, Alberta Agriculture, Food and Rural Development
Statistics Canada
Darcy Undseth, Canadian Food Inspection Agency
This paper conveniently leaves out any points pertaining to potentially stopping, or at least curbing the captive market for OTM's, and points to science that is quickly becoming past history repeatedly.
Since the paper was produced to stimulate discussion, I have taken the liberty of posting it here on Agriville. Please comment, as this resolution will make the floor at the AGM and will finally be given the respect it has deserved for three years now.
VOLUNTARY BSE TESTING
Backgrounder
Since Canada discovered its first case of BSE in May 2003, voluntary BSE testing has been a subject of debate. While many factors around voluntary testing are unknown, we do know certain things. This backgrounder is intended to provide ABP delegates with factual information and questions to consider in discussing voluntary testing.
This backgrounder looks at the relationship between voluntary testing and market access, voluntary testing as market strategy, and voluntary testing and public perceptions.
Testing and Market Access
Regaining access to foreign markets involves government level negotiations on regulations and import protocols. Industry in both the exporting and importing countries can add input to the process but in the end governments regulate imports and the final decisions on import regulations will rest with the importing country government.
According to Foreign Affairs and International Trade Canada, no nation has requested that Canada test for BSE as a pre-condition of gaining access.
The World Organization for Animal Health (OIE) does not recommend testing as a market access condition or as a food safety measure (http://www.oie.int/eng/normes/mcode/en_chapitre_2.3.13.htm).
According to Peter Kuperis, Senior Trade Policy Analyst with AAFRD, under World Trade Organization (WTO) rules, imported and domestically produced “like products” must receive the same treatment. Given this requirement, a nation would risk breaking WTO rules if it required testing of imported beef from only one BSE-affected country. If the importing country has found BSE in its domestic herd, it would also need to test its own beef before imposing testing on imported beef. Japan’s current import regulations comply with these general WTO rules.
Nations may have one regulation for all imported beef or they may have different regulations for different countries according to their disease status. According to Peter Kuperis, an offer by Canada to allow voluntary testing would be difficult for an importing country to respond to. Under what conditions will it allow entry of this voluntarily tested Canadian beef?
South Korea is a good example. South Korea currently bans all imports of all types of beef from Canada. If Canada requested access for OTM beef from plants doing voluntary BSE testing how should South Korea respond? In order to allow such beef in, the ban on all imports from Canada must be lifted or changed. Should Korea only lift it for tested OTM beef, in essence imposing testing on all Canadian OTM exports to South Korea? How would South Korea justify imposing testing on Canada but not on other BSE affected trading partners? Or should South Korea impose testing on OTM beef from all BSE affected countries? Should it lift the ban on all Canadian OTM beef?
Proponents of voluntary testing point out that until the question is asked no one really knows how importing country authorities will respond.
Using testing as a “bargaining chip” in market access would be a substantial change from Canada’s approach of relying on international scientific consensus and World Organization for Animal Health (OIE) guidelines to establish import protocols.
Canada has agreed to protocols for exporting hormone free beef to the European Union (EU) even though the WTO has ruled that the EU’s ban on beef from hormone treated cattle violates international trade rules.
The Canadian Food Inspection Agency (CFIA) does not have an official policy regarding voluntary testing. According to Darcy Undseth, Veterinary Program Specialist-BSE, of the CFIA, developing a policy on voluntary testing would involve Agriculture and Agri-Food Canada, Health Canada and Provincial governments. The CFIA has discussed testing with the Beef Value Chain Roundtable (a beef industry/Federal Government advisory group) but no consensus has been developed, except for the use of testing in the event of a catastrophic market loss.
Questions
If Canada agrees to voluntary testing for one country will other nations demand it?
Would offering voluntary testing as a way to improve or expand market access set a new and costly standard (e.g. Canadian beef must be tested while U.S. beef is not)?
Would allowing voluntary testing affect progress on the rule to allow OTM beef and cattle into the U.S.?
How will test results from voluntary plant testing be used in our BSE surveillance program?
Who would announce a positive result from a testing plant? Who will certify the accuracy and reliability of plant tests?
Would allowing voluntary testing raise interest among importers and consumers in some markets and increase pressure on their governments to open to Canadian beef?
Voluntary Testing as a Market Strategy
Any discussion of a marketing strategy will be speculative since no one can know for certain how consumers or markets will react until the strategy is tried. There are, however, some facts about testing that can help this discussion.
According to Tony Martinez, President of Rancher’s Beef, the cost to test for BSE would be approximately $20-$25 per head based on 800 tests per day. This estimate covers all costs for the test strips, staff and the container lab needed to conduct the tests. This estimate does not include possible segregation and tracking costs that may result from any CFIA testing protocol.
Rancher’s Beef has expressed interest in voluntary testing and is prepared to pursue it as a marketing strategy. Rancher’s Beef did not have success in persuading governments to allow voluntary testing. Rancher’s Beef is still interested in testing as a business opportunity but is not prepared to further pursue the issue with governments at this time.
Rancher’s Beef sees voluntary testing of non-age verified animals as a way to add value to the product and offset the increased inspection costs associated with SRM removal.
Rancher’s Beef has strong indications form Japanese import companies that they would buy tested Canadian beef it was available but the Japanese government has not made a formal request for testing to any exporting country.
Japanese industry association officials have indicated to the Canada Beef Export Federation that Canada is not reliably supplying beef from under 20 month animals and that the beef from these animals does not have the marbling required by Japanese consumers. These same Japanese industry association officials also indicated that voluntary BSE testing of over 21 month animals (and animals whose age can not be verified) would qualify a much larger number of carcasses for the Japanese market and would increase the saleability/value of this product in Japan. A similar message was delivered in August 2006 by the Executive Director of the Japan Meat Traders' Association at an industry meeting in Alberta.
Other products have developed niche markets using health or certification attributes that are not required by government (e.g. organic food, natural beef).
Foreign Affairs and International Trade Canada is not aware of any country that has used voluntary testing as a market access or product differentiation strategy.
Prior to 2003, most of Canada’s OTM beef was exported to the United States. According to Statistics Canada, 90% of Canadian beef exports in 2002 went to the U.S. This is likely to be the case again when the U.S. opens to OTM beef and cattle. (http://www.statcan.ca/english/research/11-621-MIE/11-621-MIE2003005.htm).
It is reasonable to assume that Australian 85 % lean beef would be the main competitor/substitute for BSE-tested Canadian beef in many offshore markets. Since May 2003, the price of Australian lean beef in Canada has ranged from $1.37/lb to $1.56/lb. The current price is $1.45/lb which is similar to the current 85% lean Canadian product price (Source; CanFax).
Canada has developed an animal identification system that will allow it to use age verification and other product tracking capabilities to differentiate its beef.
Questions?
How much extra value would voluntary testing add to OTM beef?
Would the number of plants currently interested in voluntary testing slaughter enough cattle to affect general price levels?
Japan appears to be the only market being considered for voluntary testing. Is this market lucrative enough to justify the potential risks of testing?
If voluntary BSE testing is a successful strategy how easily can our competitors adopt it?
Voluntary Testing and Public Perception
Consumer confidence in beef remains high in Canada. Quarterly polling by Ipsos Reid consistently finds that 88% of Canadian consumers give beef a safety rating of 5 or greater on a scale of 1 to 10.
Government and industry have consistently stated that Canada’s BSE safeguards (SRM removal, feed ban, surveillance) result in a safe product for consumers.
The only countries that have used extensive BSE testing, outside of a surveillance program, are the EU and Japan. In both cases authorities stated that the testing was done to restore lost consumer confidence. Japan has stopped requiring mandatory testing of slaughter animals under 20 months of age.
Questions
How would Canadians react to hearing that plants are testing for export markets but aren’t required to test for the domestic market?
Will plants testing for export markets also advertise and sell tested beef domestically? How would this affect the domestic market?
Would testing only certain cattle (e.g. OTM) create the impression that beef from this particular class of cattle is less safe? Or that non-tested OTM is less safe?
How will major domestic UTM beef buyers react?
Information Sources:
Beef Information Centre
Geoff Adams, Foreign Affairs and International Trade Canada
Canada Beef Export Federation
CanFax
Peter Kuperis, Alberta Agriculture, Food and Rural Development
Prionics Ag.
Tony Martinez, Rancher’s Beef
Statistics and Data Development Unit, Alberta Agriculture, Food and Rural Development
Statistics Canada
Darcy Undseth, Canadian Food Inspection Agency
Its a wonder Al Gore let Canucks use "HIS" internet...
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