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Minister Uses Checkoff To Punish Opposition

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    Minister Uses Checkoff To Punish Opposition

    Minister Uses Checkoff To Punish Opposition

    Will Verboven

    EDITOR Alberta Farmer Express

    This arbitrary decision [Bill 43 and removal of ABP secure funding]by the minister will have national and even international consequences on the cattle industry.

    Alberta Agriculture Minister George Groeneveld has sent a clear message to livestock producers in this province — “It’s my way or the highway.”

    In an unprecedented move, and without a producer plebiscite, he has introduced legislation to turn the compulsory Alberta Beef Producers (ABP) and other groups’ non-refundable checkoff into a refundable levy. This was after the minister on two occasions told this editor that the future of the cattle checkoff was in the hands of cattle producers and not him. It is now clear those hands belonged to his cattle producer political allies, the Beef Industry Alliance (BIA), and not the vast majority of cattle producers represented by the ABP.

    The minister said his decision was to give “choice” to producers and was in line with the “choice” position the Alberta government maintains on the Canadian Wheat Board. Sorry Mr. Minister, no one believes you, offering choice never seemed to be a concern before unless it involved a plebiscite. This looks more like desperate grasping for an excuse.

    The minister said his decision was also to deal with governance problems in the Alberta cattle industry. That may be wishful thinking. In the fractious world of Alberta cattle producer politics, “who governs” is a blood sport. Sectors of the industry are polarized by money and power issues and the ever-present tension between primary cow-calf producers and the powerful cattle feeders. This decision all but guarantees further power struggles as the minister is perceived to be favouring one producer group over another.

    In a shameful attempt to legitimize this obvious attack on the ABP, he also eliminated the non-refundable checkoffs for Alberta Pork, Alberta Lamb Producers and the Potato Growers of Alberta. This would have come as a complete surprise to those groups who had deemed themselves to be on friendly terms with the minister. Ironically, the pork and lamb groups were even loyal supporters of the minister’s much-vaunted Livestock and Meat Strategy. It would seem those groups were caught in the crossfire between the minister and the ABP.

    This will probably see the demise of Alberta Lamb Producers as a viable organization, being they could barely survive on the limited funds from their non-refundable checkoff.

    No doubt the minister will trot out data that shows that the existing non-refundable boards and commissions have a very low refund level. Sorry, but a dime a bushel checkoff does not compare to three bucks a head. Besides, most of the other refundable groups in Alberta are not faced with multimillion dollar trade challenges and national and international marketing programs.

    This arbitrary decision by the minister will have national and even international consequences on the cattle industry. The math is simple. Alberta, with the largest cattle industry in the country, is the main funding source for such groups as the Canadian Cattlemen’s Association. Alberta money also supports myriad cattle and beef industry promotions, animal welfare, lobbying and research efforts and organizations. All of that cash came from the ABP non-refundable checkoff. All of that good work will now be in jeopardy.

    PAYING FOR TRADE CHALLENGES

    A huge concern is that if the cattle industry is once again faced with an American trade challenge, the millions needed to fight that will not be available with a diminished ABP.

    In the minister’s announcement no mention was made of the national cattle checkoff. This is a mandatory non-refundable national agreement to which Alberta is a signatory. It requires Alberta and the other provinces to submit one dollar in nonrefundable checkoff per head to fund groups like the Beef Information Centre, the Canada Beef Export Federation and the national cattle research fund. At present the national checkoff is collected by the ABP through its non-refundable provincial checkoff process. If the Alberta government does not agree to honour the non-refundable national cattle checkoff, it could see a reduction of millions in support to beef promotion and research organizations in Canada and in export marketing programs.

    It would seem that the minister in his quest to rein in the ABP may have opened a whole new can of problems.

    This decision also puts Canadian beef exports at a disadvantage. At the international level our competitors, the U. S., Australia, New Zealand are all well-supported by large non-refundable cattle checkoffs. This decision may even see the implementation of the compulsory levy on beef imports into Canada delayed.

    This is a clear victory for the BIA, but if they think all those big future checkoff refunds will be redirected to their bank accounts instead of to the ABP, they need to be reminded of human nature. I expect that on the whole checkoff refunds will be viewed like tax refunds by producers and will be spent on some personal pleasures rather than being sent to some other producer lobby group. Perhaps the newly enriched BIA groups should now practice what they preach and offer their members the opportunity to request refunds on their annual fees if their organizations are not performing.

    The expectation is that those opposed to the ABP will want checkoff refunds as a matter of principle. Cattle dealers and feedlot operators who live and die on narrow margins will also see checkoff refunds as a way to stem losses or increase margins. Who could blame them — if a $2,000 checkoff refund is the difference between profit and loss, that decision is easy.

    I expect that there may also be a hidden agenda to the minister’s decision. His baby, the Alberta Livestock and Meat Agency (ALMA), is at present being funded by government grants. The time will come when that agency will have to stand on its own, what better way to fund ALMA than through a checkoff on livestock transactions? Heck it might even have to become a non-refundable checkoff like its Australian model. One might scoff at such connivance, but remember — what the minister takes away by law he can force back by law. You read it here first.

    #2
    Why am I not surprised that you are spreading this redneck paranoia Farmers_son? I think that article is full of nonsense and half baked truths.
    On redirecting levy - Will reckons human nature will see producers pocket the money and leave BIA groups disappointed - I disagree look at Manitoba and BC they have refundable levy and only 7-10% of members want it redirected. If as you always argue ABP does a great job representing all producers you have nothing to worry about - you won't lose any funding.

    On the newly enriched BIA groups practising what they preach and offering refunds of their annual fees - wake up that already happens! These are voluntary groups and if members don't like the way they are run they withhold their annual membership fees. A free-market, democratic system and now ABP is being put on the same program, welcome to the real world.

    By the way I read your letter in the Rimbey paper f_s, be sure and check next week's edition for a reply. If they don't sell the Rimbey paper out where you live you can view the letters at:
    http://www.albertalocalnews.com/rimbeyreview/letters/

    Comment


      #3
      Nothing like a good conspiracy. If the forced membership democratic ABP would have listened to its constituents a few years ago this would all be a moot point. It would be my guess that the ABP would have had the results it wanted 2 years ago besides. Our truly democratically elected Government which we can choose to vote in or out has had to step in and deal with this. I have been hoping that leaving my checkoff dollars with the ABP would be what I wanted to do with it. Boy they are making it hard. As far as any other organization, I will continue to support them with voluntary membership until they quit listening to its constituents. Of course that is the difference.

      Comment


        #4
        Looking at it as a Manitoba producer this thing is a worry. Especially if those checkoffs are refunded. We've found that a lot of the biggest feeders are the ones who ask for the refunds. After all, when you buy a short keep who was also a backgrounded calf, you are buying a calf who has paid more than one checkoff already. It's not hard on the conscience to ask for your money back.

        From the outside looking in, what we see is that the provincial government in Alberta is stepping up and bringing in changes to the beef industry in Alberta, while the feds stand back and watch. There are rules being written in your province that are affecting the other provinces, and we have no say in any of it. We are being asked to comply with regulations in Alberta with no input, and no reward. Just the promise of less discounts....... ya right.

        WHERE IS THE FEDERAL GOVERNMENT???? Standing back and letting one province dictate the rules is a giant step backward. Whether the strategy works or not is not the point. The point is that we are left sitting here wondering what is to happen to the rest of us. Letting one province, (which happens to have more money than the rest of us), use that money to prop up it's own industry to the detriment of neighbouring provinces is exactly what the federal government is supposed to be watching out for. Whatever happened to national policy?

        At least you guys got some kind of a cheque in the beginning, and have some political options if you don't like how it's going. We got not one dime, and have no options, even though we will be affected by what you do whether we like it or not.

        Comment


          #5
          What matters is Alberta cattle producers are not being allowed to decide the matter for themselves through a plebiscite. Why won't the Stemach government allow a plebiscite, not only for the province's cattle producers but pork and lamb too? That is an important question and one that this government has been unwilling to answer.

          Maybe Will Verboven has it figured right.

          Comment


            #6
            Charlie:

            First you say wheat carryover will be 8mmt, then you say 6? Perhaps 4mmt is next? Is this why you no longer work for the CWB marketing department?

            Rolf: How is the stinky pig market doing these days? I dumped all my frozen pork in the garbage.... yuk! BBQ steak and chicken for my family this long weekend.

            Comment


              #7
              Kato, I don't know why it should really worry you in Manitoba after all we weren't worried when your province or BC made levies refundable. The only implication that would affect you is if a huge diversion of funds takes place and ABP can't fund the CCA. How much has CCA done for Canadian producers in recent years though? - not much in reality.
              I don't think the feds have any business being involved in provincial levy distribution arrangements - it's not their jurisdiction.
              You say "Whether the strategy works or not is not the point." - I don't think that is true I think that is an important point. If it does work this has the potential to raise returns to all Canadian producers - other provinces would be dragged up in the wake of any price increases/demand increases but if it doesn't work Alberta, as many argue on here, has just handicapped it's producers with a higher cost structure relative to the other provinces so you would in theory be better off. I don't see what political options we have that you don't - they appear to be equal from my perspective.

              Farmers_son, This plebiscite story just kills me - if it was so important why did y'all resist it so vociferously for the last 3 years? and then change your tune when you got wind the Government was going to intervene on the levy issue. What a bunch of hypocrites.

              Comment


                #8
                GF - I think I have made my position on
                what I think of ALMA fairly clear.
                I appreciate Kato's concerns as anyone
                who markets feeder cattle into AB (most
                of the prairies and BC) is basically
                forced to comply. This creates a cost
                structure for them. This is one of the
                main reasons I see feeding becoming
                more local in MB and SK and fed cattle
                going stateside to die.
                If the border closes for some reason
                (real or imagined), we all need to hold
                on, grease up and bend over, because it
                is not going to be pretty.
                As far as ALMA is concerned, I guess I
                will always struggle to believe that it
                adds one red cent to my operation. I
                think any profits or new markets or
                innovations will come directly from the
                blood sweat and tears of producers on
                an individual level working together
                with other individuals. Most commodity
                producers need to be prepared for
                higher costs and lower margins and the
                need to increase economies of scale.
                In other words, I don't believe that
                even ALMA can make the role of the
                cattle producer as we know it today
                sustainable. On the federal level,
                working on market access is important
                (and currently piss poorly done).
                Quite frankly ABP and CCA should not
                require a war chest to fight trade
                disputes, as that is solely 100% the
                responsibility of the federal
                government.
                I am not 100% opposed to refundable
                checkoff, although I do understand the
                cons as well as the pros of the issue.
                I do think that GG and ABP have to
                share some of the blame as what we have
                here is a failure to communicate.
                Currently the tone of any discussions
                is counterproductive.
                I know it is a short time frame since
                ALMA was introduced, but I believe the
                pressure is on to prove real, tangible
                benefits to producers that are the
                direct result of the programs and
                legislation associated with ALMA. I
                think proving that is a tall task, and
                I can't see Cargill or NB returning one
                red cent more to the industry than they
                need to in order to secure supply.
                Cattle are worthless until they are
                dead, and you can't store them in a
                bin.
                I think the $300,000,000 could have
                been split by 1/2 and spent working on
                contract kill facilities and staff to
                walk producer groups through trade and
                export hoops.

                Comment


                  #9
                  It's the funding to CCA and such that does bother me. The number of producers in Manitoba is not as large as in Alberta, so even if we all requested a refund, it wouldn't affect things all that much. The fact is that most of us don't ask for our money back. I know we personally don't. It's not just the CCA that gets funds, but also the BIC. They do good work, in my opinion, and I don't mind supporting them.

                  I also agree that fighting trade issues is not the job of the CCA, but the job of the government, especially when the trade issues come up due to things the government has or has not done.

                  It's the fact that Alberta is going ahead on it's own and dictating how the beef industry is going to develop that bothers me. The rest of us are just along for the ride whether we like it or not. This is not a provincial responsibility under our country's basic structure. How long will it be before we are ten little countries? There are already almost as many interprovincial trade barriers as there are international barriers.

                  In a lot of ways, for producers in Manitoba, Saskatchewan and B.C., it's getting so that living next to Alberta and being dependent on living up to Alberta based rules and regulations with no input or payback is not much different from living next to the U.S.

                  Comment


                    #10
                    I don't think you can have it both ways - ALMA either costs producers in MB SK because they feel forced to comply or they are given a competitive advantage by keeping the cattle home, fattening them and sending them stateside without them ever visiting AB. I don't see how it can cost them both ways.
                    If the border closes we are all in trouble (again), no change there but at least ALMA seems to be raising production standards to attract offshore markets.
                    I agree on the market access issue being one that should be fought and funded by the Federal government.

                    It certainly would be nice to have seen money backing contract kill facilities but in reality that was never going to happen - Shirley after all let the cat out of the bag and indicated that when Cargill came here they more or less got a promise that the government would not fund anyone else to be in competition with them.
                    Given that restraint I think the only thing governments can do is to ensure fairer trading conditions that might allow upstart plants a fighting chance. Government at both levels need to work on captive supply/packer ownership but more importantly make it unacceptable for established packers to blackmail the domestic retailers into buying produce only from their plants. We need proper anti-competition laws introduced and enforced. We need ambitious plans to get beef exported off this continent that does not in AB go through a Cargill or XL plant first. These are all big issues and this is a huge task but I think at least the AB Government are trying to achieve some of these goals with ALMA. The Feds and other Provincial Governments are doing nothing as far as I can see.

                    Comment


                      #11
                      Have to agree that at least the AB gov has set goals, my concern is that these goals were set with the major packers to give them ( the packers) the competitive in the world stage. The only problem with this is that the majors don't have to share this competitive edge.
                      Sell the age verified worldwide for a good margin and bring in cheaper animals for the Canadian consumer. Great work! I can't even buy source verified/age verified at my local store but I, a producer, has to verify. Sounds like a heck of a marketing plan.....for, guess who?
                      Gotta love those that can afford lobbyists!

                      Comment

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