I believe that the summary offerred by the NFU needs highlighting. This is not an endorsement of their solutions but I can certainly echo their initial conculusions
1.4 Executive Summary: Several possible solutions
The preceding pages offer a summary diagnosis; the Main Report provides many further
details of, and insights into, the various maladies plaguing the cattle and beef sectors. But
what is the prescription? What is to be the treatment?
Restructuring a sector is hard. Such a process takes time. Policy-makers must ensure that
the costs and benefits of restructuring are both distributed broadly. In the absence of such
care, the largest and most powerful players will push all costs onto the smallest and weakest;
the 2003 BSE-triggered crisis, with its packer profits and farmer losses, provides a stark
demonstration of this make-the-little-guy-pay dynamic.
Restructuring our cattle and beef sectors will be made harder by the fact that Canada has
allowed a critical link—our packing plants—to be largely captured by two foreign-based
transnationals, Cargill and Tyson. Restructuring will also be made more challenging by the
weakened and impoverished state of our cow-calf producers and small- and medium-sized
independent feeders; these sectors are financially exhausted and less resilient than in previous
decades.
Another impediment to restructuring is the fiction of free, fair, and open markets—a fiction
common in cattle-industry publications and at industry meetings. In an age of captive
supplies, two-packer control, giant grocery chains, and packer-owned auction yards, the “free
market” has become one part nostalgia and one part parody. To make real progress, we need
to develop and popularize a more sophisticated, up-to-date, and business-like assessment of
market realities. As the former CEO of agribusiness giant Archer Daniels Midland (ADM)famously said in the early years of this decade:The free market is a myth. Everybody knows that. Just very few people say it. If
you're in the position like I am and do business all over the world, and if I'm not smart enough to know there's no free market, I ought to be fired. . . . You can’t have farming on a total laissez-faire system because the sellers are too weak and
the buyers are too strong. Another impediment is that our political class is increasingly timid and deferential in its dealings with the corporate aristocracy. It sometimes appears that the office of government livestock policy is at risk of becoming a wholly owned subsidiary of the packing ector. In private conversations, insiders in the Alberta beef, cattle, and political sectors readily acknowledge the connections between large feedlots, packers, and some federal and
provincial politicians. Astute observers are thus not surprised that packers’ interests are well-protected in Edmonton and Ottawa.Despite these challenges, we must move ahead with bold solutions. The alternative, the
status quo, is to watch the majority of cow-calf producers and independent feeders financially ruined and forced out; it is to watch an ever-greater portion of our beef production wealth
captured by transnational packers and retailers, extracted from rural areas and from the nation as a whole and shunted off to shareholders and executives at Cargill, Tyson, Wal-Mart, and Safeway. Whether we act or whether we do not, our cattle and beef sectors will be
restructured; they’re being restructured now. Our only decision is this: Will we do the
restructuring, or will it be done to us? Are we masters in this house? Or are we servants?
1.4 Executive Summary: Several possible solutions
The preceding pages offer a summary diagnosis; the Main Report provides many further
details of, and insights into, the various maladies plaguing the cattle and beef sectors. But
what is the prescription? What is to be the treatment?
Restructuring a sector is hard. Such a process takes time. Policy-makers must ensure that
the costs and benefits of restructuring are both distributed broadly. In the absence of such
care, the largest and most powerful players will push all costs onto the smallest and weakest;
the 2003 BSE-triggered crisis, with its packer profits and farmer losses, provides a stark
demonstration of this make-the-little-guy-pay dynamic.
Restructuring our cattle and beef sectors will be made harder by the fact that Canada has
allowed a critical link—our packing plants—to be largely captured by two foreign-based
transnationals, Cargill and Tyson. Restructuring will also be made more challenging by the
weakened and impoverished state of our cow-calf producers and small- and medium-sized
independent feeders; these sectors are financially exhausted and less resilient than in previous
decades.
Another impediment to restructuring is the fiction of free, fair, and open markets—a fiction
common in cattle-industry publications and at industry meetings. In an age of captive
supplies, two-packer control, giant grocery chains, and packer-owned auction yards, the “free
market” has become one part nostalgia and one part parody. To make real progress, we need
to develop and popularize a more sophisticated, up-to-date, and business-like assessment of
market realities. As the former CEO of agribusiness giant Archer Daniels Midland (ADM)famously said in the early years of this decade:The free market is a myth. Everybody knows that. Just very few people say it. If
you're in the position like I am and do business all over the world, and if I'm not smart enough to know there's no free market, I ought to be fired. . . . You can’t have farming on a total laissez-faire system because the sellers are too weak and
the buyers are too strong. Another impediment is that our political class is increasingly timid and deferential in its dealings with the corporate aristocracy. It sometimes appears that the office of government livestock policy is at risk of becoming a wholly owned subsidiary of the packing ector. In private conversations, insiders in the Alberta beef, cattle, and political sectors readily acknowledge the connections between large feedlots, packers, and some federal and
provincial politicians. Astute observers are thus not surprised that packers’ interests are well-protected in Edmonton and Ottawa.Despite these challenges, we must move ahead with bold solutions. The alternative, the
status quo, is to watch the majority of cow-calf producers and independent feeders financially ruined and forced out; it is to watch an ever-greater portion of our beef production wealth
captured by transnational packers and retailers, extracted from rural areas and from the nation as a whole and shunted off to shareholders and executives at Cargill, Tyson, Wal-Mart, and Safeway. Whether we act or whether we do not, our cattle and beef sectors will be
restructured; they’re being restructured now. Our only decision is this: Will we do the
restructuring, or will it be done to us? Are we masters in this house? Or are we servants?
Comment