Refund Procedures Front And Centre

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Money was the root issue for resolutions at the Alberta Beef Producers’ (ABP) Zone meeting here Nov. 5. Stavely rancher Larry Sears started things off when he questioned a surcharge increase by the Canadian Cattle Identification Agency (CCIA) on radio frequency identification tags. That surcharge goes to 60 cents from 20 cents, and the motion to have the Canadian Cattlemen’s Association check into the increase was carried by the 200 producers at the meeting.

Jack DeBoer of Nobleford, who sits on the CCIA board, said the surcharge was raised because it had never gone up. If the surchange doesn’t increase, CCIA could be bankrupt in six months, DeBoer said, adding that it isn’t just for animal identification. “If CCIA does not work on traceability, government will do it,” he said.

A producer asked how much CCIA will earn with the increased surcharge. DeBoer said it covers about four million cattle. The increase of 40 cents will add $1.6 million to the CCIA budget.

“If CCIA does not work on traceability, government will do it.”

The pending shift to a voluntary checkoff also raised a lot of debate. DeBoer suggested the ABP checkoff system, which will include a voluntary refund request portion on April 1, should be turned over to Livestock Identification Services (LIS). An LIS study two years ago showed that about $450,000 a year was slipping through the system operated by ABP. “It makes lot of sense for LIS to collect the checkoff since it checks on brands already,” said DeBoer.

Zone 2 director Brent Carey of Stavely said that there has been lots of talk around the industry about the slippage. “Certainly, there will be some slippage. For instance, cattle that are exported don’t pay.”

Carey said ABP has the legal responsibility to collect the checkoff, and now the legal responsibility to make refunds.

ABP chairman Rick Burton of Claresholm said this is not a new discussion. LIS approached ABP two years ago. ABP considered it strongly. But there was a wide disparity between LIS numbers and ABP’s economist’s. ABP estimated just more than $130,000 in slippage. “I can’t speak to slippage,” said Burton. “We are talking neighbour-to-neighbour business, and freezer beef. That’s what slippage we are talking about. I sold 50 cow-calf pairs to a buyer near Cochrane and have not yet submitted the checkoff. I also know that the cost charged by LIS could exceed the possible gains,” Burton said.

Bill Van Rootselaar of Granum pondered a change to have ABP look at the cost of an LIS agreement, considering two more years of current data. Picture Butte cattle feeder Rick Paskal said the slippage is critical. Government often levers producer money 10 times. At $130,000, that is more than $1 million. Producers passed a motion to study the feasibility of having LIS collect the checkoff and administer any refunds after April 1.

CO-ORDINATED EFFORT

In what appears to be a coordinated effort by some individuals allied with the Beef Industry Alliance group, similar resolutions were put forward at many ABP zone meetings across the province. ABP meetings in Longview and Strathmore defeated the resolutions.

Alberta Beef Producers’ mandatory checkoff will end April 1, 2010, and it is forcing the organization to adjust. Rick Burton of Claresholm, who will end his term as ABP chairman at the organization’s December annual meeting, said the checkoff will continueat the point of sale.

Burton told producers ABP expects to work on refund requests on a monthly basis.

“We have no idea of the volume of refund requests,” he said. Anybody asking for a request must ask within two months after the end of the month the cattle were sold.

Producers will also be asked to provide the transaction number from auction or packer. Markets and dealers who collect the checkoff will also be required to submit the paperwork on the transactions. ABP will also keep its service fee of five cents a head.

Van Rootselaar said five cents is not nearly enough for ABP to run the program. It should be increased.

Another producer asked if he must state a reason for asking for a checkoff refund. “If you ask for a refund, you will get a refund,” said Burton. If you ask for a refund, you don’t have to ask for all the checkoff the producer paid in a year. A producer can leave money with ABP if he wants.

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