Minister Axes Nonrefundable Checkoffs

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In a surprise announcement, Alberta Agriculture Minister George Groeneveld says he will introduce legislation to end non-refundable commodity checkoffs in Alberta.

This move affects only four organizations, Alberta Beef Producers, Alberta Pork, Alberta Lamb Producers and the Potato Growers of Alberta. Supplymanaged poultry and dairy boards are not affected. All other commodity groups with mandated producer levies now have refundable checkoffs.

In announcing the legislation, to be known as Bill 43, Groeneveld said, “It is important to have consistent legislation. This ensures producers all have the same fundamental right to choose how their hard-earned money is spent. If they feel their organization has not met their needs or provided value, they can ask for a refund. It is all about choice.”

“This action will aggravate the divisions that already exist within the cattle industry.”

The government’s position on freedom of choice follows the minister’s comments last year about consulting producers before any decision on checkoffs. However, he indicated in a recent radio interview that the bill will go ahead even if 80 per cent of producers favoured a non-refundable checkoff. A producer plebiscite on the non-refundable cattle checkoff in 1994 resulted in a narrow margin in favour.

Besides the Alberta Beef Producers, the other affected commodity groups all expressed their disappointment in the Minister’s decision to eliminate their nonrefundable checkoff without a plebiscite (see sidebar).

The Beef Industry Alliance (BIA), a consortium of the Alberta Cattle Feeders Association, the Beef Industry Initiative, Western Stock Growers Association and the Feeders Association of Alberta, said that they were in favour of the changes. “This legislative change represents choice for producers, accountability for the industry, and an exciting new direction forward in which all members of the beef value chain will be represented in the industry governance system,” said BIA Chairman Russ Pickett.

The BIA has lobbied for the changes to the cattle checkoff for some time, saying that since BSE, cattle producers have been forced by legislation to pay over $70 million in checkoff levies to ABP with little to show for their money. Pickett said, “A refundable checkoff is an enduring plebiscite that will mean that organizations will have to earn producers’ support every day. This is an important step to repair some of the fractures that have developed in our industry.

“We will be contacting ABP in the coming days to discuss how we can work together to implement these changes and improve the beef industry in Alberta for all.”

That contact may be easier said than done. The ABP in response to the decision said, “This action will aggravate the divisions that already exist within the cattle industry. The imposition of a refundable checkoff shifts control from a democratic system where each producer has an equal vote to a system where very large producers will have more influence as a result of controlling a greater amount of checkoff dollars.”

ABP chairman Rick Burton said, “I told the Minister that we should have a dialogue with BIA on this matter before a decision was made, but it seems we could never get anything meaningful going. I think the BIA felt that this was a done deal some time ago.”

The ABP had requested that a plebiscite be conducted to ascertain the democratic will of cattle producers. Some of the other affected groups have also made a similar request.

However the minister by his action seems to have ruled out that possibility. The only other avenue is to have the proposed legislation withdrawn or amended. ABP Chairman Burton said, “We are launching a media campaign to encourage cattle producers to contact their MLAs to demand that they be given the right to vote on this decision.”

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