There’s no resolution in sight on the issue of checkoffs, even though beef industry groups say research and marketing will suffer if the levies aren’t increased.
“We need to invest more in marketing, research, and issues management,” said Rich Smith, executive director of Alberta Beef Producers (ABP).
“We simply believe we need a higher level of industry funding if our industry is going to remain competitive. That’s for the national levy and provincially, we have the same challenges.”
Currently, a $1 non-refundable national checkoff is charged on every head of cattle sold or slaughtered in the province. There’s also another $2 provincial checkoff, but it is refundable and that has cost Alberta Beef Producers millions.
In regional meetings last fall and at ABP’s annual general meeting in December, producers strongly voted in favour of raising the national checkoff to $2.50 a head and making the provincial one non-refundable.
“We are looking to be able to retain the over $2 million a year that we are currently losing in refunds,” said Smith. “It makes us less reliant on government funds, which is good, because there are fewer government funds.”
ABP, which was unsuccessful in persuading past Conservative governments to reverse a 2009 decision to make the checkoff refundable, has been lobbying the NDP administration on the issue. It has also been in talks with Alberta Cattle Feeders, whose members account for most of the checkoff refunds.
Both sets of discussions are continuing, said Smith.
Boosting the national checkoff would also require a change in regulations, as well as negotiations with the Ministry of Agriculture and the Alberta Agricultural Products Marketing Council, he said.
Unless the national levy goes up, funding for beef research will have to be sharply reduced when the next round of Growing Forward funding begins on April 1, 2018, said the executive director of the Beef Cattle Research Council.
“We’ve been operating on a declining balance due to reduced marketing and the increased costs of research,” said Andrea Brocklebank. “We won’t be able to fund a $20-million science cluster like we did last time if we don’t increase the national checkoff.”
The national levy, which is shared by her organization and by Canada Beef (for marketing efforts), hasn’t been changed from $1 since it was first created in the 1990s.
“Inflation alone has had a huge impact on industry in terms of our ability to use those dollars to invest in research and marketing,” said Brocklebank. “About 30 cents of the dollar has disappeared due to inflation.”
That inflationary loss has a ripple effect, she added.
“For every dollar we invest, we usually leverage about three federal dollars and then other federal and other government money as well,” she said. “There’s an expectation that industry must invest if it wants government to invest.”
Currently about 16 cents of every dollar goes to research, but if the checkoff was raised to $2.50, that amount would rise to about 50 cents.
“It is a large increase, but it’s important that we position ourselves strongly to address public confidence issues,” said Brocklebank. “Ultimately, the primary goal is to grow productivity within our industry. We’ve seen research do that in the past.”