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The good, the dry and the troubling

Year in Review: Mother Nature threw a curveball and so did governments, 
while the beef sector reached some major milestones

In one sense, the story of 2017 was all about what happened on your farm, mostly about how much rain you got and when — or if — it came.

But it was also a year when things that happened in meeting rooms you’ve never visited had a big impact on your operation. If those meetings were in the halls of power in Ottawa or Edmonton, you had reasons to be concerned. But if it was beef organizations getting together, you had reason to be thankful.

Here are four stories from the past year that are particularly noteworthy:

Two years on, safety rules still not settled

Producers looking for less talk and more action couldn’t help but be disappointed by the slow progress on defining what workplace safety legislation will mean on their farms.

But turning the year-old Enhanced Safety for Farm and Ranch Workers Act into ‘you can do this but not that’ regulations was always going to take time, says the co-chair of the Alberta Farm and Ranch Safety Coalition.

“When you go through all the different codes and how they impact farms, there’s just a ton of information,” said Irma grain grower Kent Erickson. “It’s really tricky.”

After the tumultuous protests two years ago over extending workplace health and safety rules to farms, an unprecedented alliance of Alberta farm groups came together to form AgCoalition. It had reps on all six technical working groups (called ‘tables’) charged with recommending specific rules and regulations. They spent a lot of time explaining to the non-farmers on the panels what did — and didn’t — make sense at a farm level.

But in May, the province introduced a new bill (the Fair and Family Friendly Workplaces Act) that stripped labour relations and employment standards out of the farm safety conversation. The new bill, which came into effect on New Year’s Day, met with mixed reviews.

“This bill really does change the philosophical thinking on the farms, and we want to make sure the government knows that there are some areas of concern that we didn’t feel were presented from the tables,” Erickson said in June.

From the outset, the labour relations group had philosophical differences — particularly giving farm workers the right to form unions and go on strike — and reached consensus on only half of 10 recommendations.

“The labour table really didn’t agree with a whole lot, so with Bill 17, the government really did push forward on a number of decisions that weren’t what the ag community was looking for,” said Erickson. “So the technical working group wasn’t a lot of use on this one.”

But some farmers were still hopeful.

Kevin Serfas, who operates a large grain farm near Turin, said his initial reaction was “shock and horror.”

“But as I did a little more reading into it, I’m a bit more at ease with it,” he said in May. “I’m not sure what the appetite is for farm workers to unionize. It’s concerning for sure. Are we selling the farm because of it? No.”

Bill 17 includes new employment standards for non-family employees such as vacation, hours of work, and overtime.

“I don’t think that some of what they’re trying to push through is terrible,” said Serfas. “I think workers should have those rights. We’ve never really thought any differently.”

In October, four of the technical working groups issued 142 recommendations on occupational health and safety. Public feedback was sought but Erickson wondered what that would accomplish since most Albertans “don’t understand how things work on the farm.”

“It would be kind of like asking me to comment on a regulation that’s going to affect, say, a coal mine,” he said. “I don’t have any insights into how a coal mine is run.”

Take, for example, the call for mandatory use of seatbelts. Farmers on the working group argued it was “impractical, uncomfortable, and unwarranted,” but other group members disagreed, saying producers would get used to it just like people did in their cars. They also predicted it will “force innovation” on equipment manufacturers and make them come up with restraints that are “practical (and) comfortable.”

Another challenge to getting meaningful feedback was the sheer number of recommendations and the technical language of the reports.

“Our group took half the (labour) code and we broke it down line by line as we went through it, and even I was confused and misinterpreting and misunderstanding how we’re going to apply that to a farm,” said Erickson, noting his group had more than a year to review the material.

It’s still too soon to say what the final rules will look like — the feedback period ends Jan. 15, with the specific regulations coming out later this year.

In the meantime, AgCoalition has created an organization and program to promote a “farm safety culture.”

“We want to build safety programs from the industry up, not from the government down,” Erickson said in November. “What we’re hoping is that these programs will satisfy the intent of the legislation. By doing that, we can slowly but progressively bring our safety incident frequencies down.

“I think that’s going to be the success story.”

A lot of checkmarks in the win column

For beef producers, the past year was one when a number of long-running initiatives began to bear fruit.

Those include a new packing plant, a tentative deal on the provincial checkoff, and laying down the foundation for a national sustainable beef program.

The opening of Harmony Beef in February was never going to threaten JBS and Cargill’s domination of Alberta’s beef-processing sector. But that was never the goal — the plan is to focus mostly on higher-end markets, including Europe.

In theory, that opens the door for premiums for producers who raise cattle under specific protocols or can consistently produce very high-quality cattle. Those producers may find out this year how that pans out as Harmony Beef owner Rich Vesta said it would take a full year or more to get European certification.

“We’re not doing all this to be a commodity beef producer — that’s not our goal,” said Vesta, a packing expert who ran JBS’s North American beef division and is known for improving efficiency of plants.

The past year also saw a tentative deal to end the long-running checkoff battle between Alberta Cattle Feeders Association and Alberta Beef Producers. The key to the agreement is using part of a non-refundable checkoff to create an industry development fund that would go towards marketing, education, research, and industry collaboration.

“Both organizations are feeling really good and hoping we could make this a good solution,” said Ryan Kasko, vice-chair of the feeders’ association.

Currently, the $2 provincial part of the $3 checkoff is refundable, with about $2.5 million being refunded, mostly to cattle feeders, each year, said ABP executive director Rich Smith.

“We’re losing about 35 per cent right now, which works out to about 70 cents a head,” said Smith.

The agreement is another sign that a sector once regarded as splintered and fractious is changing its ways. Another was the second Canadian Beef Industry Conference, with more than 700 people from all parts of the sector gathering at Stampede Park in Calgary. The event continues to be a resounding success and after holding the first two in Calgary, the conference heads east and will be held in London, Ont. in August.

But perhaps the biggest sign of a new spirit of collaboration is the creation of a formal program to produce certified sustainable beef. The Canadian Roundtable for Sustainable Beef — which includes not just industry groups but also retailers and organizations such as the World Wildlife Fund — rolled out its ‘framework’ last month for producing beef in a socially and environmentally responsible way.

It was the result of years of efforts that began with McDonald’s groundbreaking verified sustainable beef pilot.

“It’s not only a Canadian program, it’s the first in the world, so we’re really excited to be launching it,” said Fawn Jackson, the roundtable’s executive director.

The program largely relies on best practices that most producers already follow, but it creates a paper trail and brings in auditing. There’s a small fee for participating producers (who need to be enrolled in VBP Plus), but the hope is that it could pay off in sales to beef buyers willing to pay more to display a certified sustainable logo on their meat packages or menus. This type of program can also be used to show the world that Canadian beef is produced according to meaningful sustainability rules and tracked all the way from the ranch to the packing plant.

Cargill is running a one-year “acceleration” pilot to test the concept and it’s hoped it will not only be a hit with consumers, but generate a small premium for cattle producers.

The roundtable has another iron in that fire with the Multiple Species at Risk (MULTISAR) program. The initiative, which began 15 years ago, is now so successful that there’s a waiting list for interested ranchers. The roundtable (along with Cows and Fish and the Canadian Cattlemen’s Association) has expanded the program from the Milk River area to producers in the Bassano, Brooks, Nanton and Medicine Hat areas. Participants receive help with the cost of items such as fencing and solar watering to enable better grazing management while enhancing habitat for both cattle and wildlife.

“It’s a big collaborative approach,” Brad Downey, senior biologist with the Alberta Conservation Association (one of the program’s co-ordinators) said in February.

“Most of the program is habitat stewardship programs that collaborate with producers on the ground to look at win-win situations and ways to not only benefit wildlife or species at risk, but also cattle operations.”

Add up all of these initiatives and Alberta’s beef sector can look back on 2017 as a year of accomplishment.

Mother Nature couldn’t make up her mind

Crop production was a mixed bag in 2017 — some producers did well, but many didn’t.

And which side of the line you fell on depended largely on how much moisture you got, both this year and last.

Late-season rain and snow in the fall of 2016 was either a blessing or a curse for Alberta farmers. For those who finished harvesting, soil moisture reserves got their crops off to a good start and kept them going through this summer’s drought.

But those stuck harvesting crops this spring found themselves playing catch-up all season long.

“The majority of guys got crops in, but some of them seeded quite a bit later than they normally would,” provincial crop specialist Harry Brook said in July.

By late May, about 80 per cent of nearly one million unharvested acres from 2016 had been harvested and only about 57 per cent of seeding was completed — well behind the five-year average of 83 per cent.

“There’s still a very small amount of acres where producers still have to deal with unharvested crops from 2016,” provincial crop statistician Ashan Shooshtarian said in May. “The wet conditions don’t allow them to go into the field to be able to remove their overwintered crops from last season.”

As a result, about 600,000 acres of cropland were left unseeded in 2017 — eight times higher than the previous five-year average.

“We’re still seeing some of the ripple effects from the spring with the unseeded acres,” Jesse Cole, a research analyst with the province’s crop insurer, said in July.

But while spring started off wet in much of the province, conditions quickly turned disastrously dry in many areas, especially in southern Alberta.

“This year, the tap turned off early,” said Brook.

In the end, yields were 75 per cent of normal in the south but 15 per cent higher than average in central Alberta.

But there was a silver lining — disease pressure dropped.

The growing season started with predictions of the continued spread of fusarium head blight (found in almost one-quarter of cereal samples in 2016), and it seemed like a safe bet at the time. But the long dry spell changed that.

“This year may not be a year where it pays to spray,” Brook said in July.

Root rot in pulses was also less than expected, as was the incidence of sclerotinia.

But it may be a short-lived break, especially for clubroot, which is “growing exponentially” across the province, Canola Council of Canada agronomist Keith Gabert said after it turned up for the first time in the Peace region in mid-August.

“I fully anticipate 300 to 400 new fields reported every year if there’s any kind of adequate moisture,” he said.

All in all, it was a year that reminded farmers that Mother Nature always gets the last word.

“This year shows that you can do everything right in your management, but if the weather works against you, you can fail,” said Brook.

Tax changes troubled producers through 2017

The taxman tried to pick a fight with farmers in the past year — and farmers fought back.

In its spring budget, the federal Liberal government announced it would be scrapping the deferred cash ticket system. Producers have long used this tool to smooth their income from year to year and the move was widely condemned by farmers, and their accountants.

“The majority of farms are not trying to avoid paying taxes,” Stuart Person, director of primary producer agriculture at MNP, said in June. “They just want to smooth their income out and make sure they’re paying tax at a reasonable rate like everybody else.”

Unlike everyone else, farmers not only have good and bad production years — they also sell into markets where prices routinely soar and crash.

Not being able to defer income would mean grain producers would routinely face a devilish dilemma: Sell when prices are high and pay a whole lot of extra tax. Or store grain and risk missing out on a price rally.

“If they do put this through, it’s going to have some significant impacts,” said Person.

But in the end, the chorus of farmer complaints and lobbying by grain organizations paid off. The feds backpedalled in November, announcing that the cash ticket deferral system would remain intact.

“We’re pleased to see the reversal on that decision,” said Alberta Pulse Growers chair D’Arcy Hilgartner.

It was a similar — although not as clearcut — story for proposed changes to income tax rules.

In the summer, the Liberal government proposed new regulations around lifetime capital gains deductions, income splitting, and incorporating farms, among other things.

The moves were intended to ensure the wealthiest Canadians paid their fair share of taxes, but the proposals cast such a wide — and complicated — net that alarms were sounding for all sorts of business owners, including farmers.

“This will affect any tax planning for farmers on an annual basis all the way until their deaths,” tax expert Allan Sawiak said in August. “It will always have to be at the back of their minds now.”

Once again, a widespread outcry and intensive lobbying had the federal government backpedalling.

The proposed changes to capital gains exemptions — one of the most controversial items for farmers, as that could have made it impossible to pass on the farm to their kids — were cancelled. Also scrapped was an ‘anti-avoidance’ provision to prevent converting dividends to another form of income at a lower tax rate, which was broad enough to include things like selling farm assets to a corporation.

But the affair may not be entirely over.

New rules are coming in 2018 that will limit ‘tax sprinkling’ by corporations to family members. Although the finance minister says the ‘reasonableness’ test will be, well, reasonable, tax experts will be watching closely to see how it unfolds.

And producers will be crossing their fingers and hoping they don’t unwittingly get caught in some income tax snare.

“A lot of these things are just ‘what ifs,’” said Hilgartner. “It’s difficult to assess what the actual risks are.”

About the author

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Reporter

Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, she has also published two collections of poetry and a biography about a Sikh civil rights activist. Her freelance work has appeared in numerous publications across Canada.

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