Alberta producers want to see the checkoff on cattle rise by a third — and be made mandatory.
Attendees at Alberta Beef Producers’ meetings earlier this winter were asked if they favoured a higher, mandatory checkoff and the answer was a strong ‘yes,’ said Rich Smith, the organization’s executive director.
“The producers who attended those meetings gave the message that they supported the national beef strategy and they recognized that there needed to be an increase in the national levy,” said Smith.
Specifically producers said they were in favour of making the $2-per-head service charge non-refundable, and bringing in a mandatory $1 provincial levy to match the $1 national one. The organization then approved that call at its annual general meeting.
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“There’s a pretty widespread understanding across Canada that our industry does not have a sufficient level of funding,” said Smith, adding Ontario and Manitoba recently increased their provincial service charges.
The service charge has been a sore point ever since it was made refundable in 2010 when George Groeneveld was agriculture minister. Each dollar of the levy adds up to about $3.5 million, so the $2 charge is worth about $7 million. But Alberta Beef Producers had to hand back $2.4 million of that money in 2013-14 — with the lion’s share, $2.1 million, going to feedlots. Most of the feedlots seeking refunds are larger operations and they haven’t been swayed by behind-the-scenes requests to leave that money with ABP.
“It’s something that we’ve talked about, to see if there are things we can do as an organization that we can do to leave their money in,” said Smith. “To this point, we haven’t been successful.”
So now the organization will head to the Agricultural Products Marketing Council to ask for the necessary legislative and bylaw changes to make the service charge non-refundable.
Long process
That process is long and involved, but ABP directors will also try to convince Agriculture Minister Verlyn Olson that a lack of funding is not only harming their organization, but holding back the entire cattle sector.
Higher cattle prices have not only made the levy more affordable, but made producers more optimistic, said Smith.
“I think people are looking and seeing opportunities in the beef industry, and we don’t want to miss these opportunities because we didn’t provide enough funding to industry organizations to help open export markets or do research that would enhance productivity,” he said.
Smith pointed to the recently released national beef strategy that, among other things, calls for a 15 per cent improvement in both production efficiency and carcass cut-out value by 2020 and also upping efforts to connect with consumers.
“When you talk to the people who are writing the strategy, they say that we’re going to have to increase the national levy beyond the $1 range to put enough money into marketing, research, and policy work to get everything done,” said Smith.
Some have suggested a levy of $2.50 is needed to implement the national beef strategy, which has not only been endorsed by provincial and national cattle groups, but also the National Cattle Feeders’ Association.
Having to hand back more than $2 million every year is also squeezing ABP’s finances. It had an operating deficit of $754,000 in the fiscal year ending March 31, 2014, and an operating deficit of $539,000 in the previous year.
The organization has been relying on reserves to bridge the gap and still be able to fund efforts such as the battle to overturn Washington’s country-of-origin labelling law.
“We’re not running an operating deficit in the sense that we’re committing in our budget more money than we have,” said Smith. “This is a deficit that represents the budget we set that year, but also previous commitments we’d made.”
