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BIC/CBEF Merger Is Not The Best Solution: WSGA

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While WSGA recognizes the benefits of having a single marketing/promotion agency, we must register our objection to the proposed narrow and traditional governance model.

The checkoff-funded provincial organizations and the Canadian Cattlemen’s Association have consistently demonstrated a bias towards North American trade. That likely is the result of their mandatory and universal “membership” limiting their ability to strongly support marketing. Regardless, the proposed governance model mimics the model of both CCA and (obviously) BIC. It represents a concentration of power in hands that have not been successful in diversifying our markets since 2003. Instead we are more reliant than ever on the U.S. and Mexico. Given that checkoff organizations rely on government legislation for their membership and funding it is logical to conclude that the CBWG’s report results in a concentration of power in government.

Recommendations

The WSGA recommends to meet the Canada Beef Working Group’s (CBWG) objective:

Change the point at which the national levy is collected to incorporate most or all of the supply chain for beef – not cattle.

Rationale: Marketing and promotion are directed at beef, not cattle. Therefore the trickle-down effect is required for a return on investment given the current funding model. All segments of the supply chain should benefit from effective marketing and promotion.

Separate market promotion/ research activities and agencies from policy organizations.

Rationale: Existing governance models (one producer, one vote, zone delegates representing universal mandated members, organizations created by and dependent on provincial legislation for their existence and funding) have not served the business interests of the industry very well. It is ironic that this fractured industry continues to adopt essentially the same governance model each time we establish a new organization.

WSGA thinks true innovation would encourage a different governance model in which a skills-based board is selected by a more direct nomination and election process than the current delegate model. Even if we wish to continue with a primary producer-dominated board we could modernize our election procedures.

Develop and implement effective metrics, tailored to the Canadian beef industry, for marketing, promotion and research activities.

Rationale: The Cranfield study failed to conclusively demonstrate return on investment on checkoff funds, particularly when publicly leveraged funds were excluded from the calculation. While the CCMDC model may be a starting point we need to move quickly to update that model. We believe this industry could mine other industries for expertise and experience in this area.

Avoid the misery of merging two cultures by starting with a clean slate for both the governance model and the delivery agency.

Rationale: Governance details in the report are traditional and not reflective of contemporary corporate governance. The proposed merger also represents an enormous risk by unintentionally encouraging an internal power struggle in the new organization which will divert attention from marketing efforts.

Industry needs to design the corporate governance structure and chain of command and identify the key positions, roles, skill sets and job descriptions for the restructured organization. We need to hire to the new agency under an open process and encouraging applications from non-beef and non-agricultural industries, and with no preference for existing BIC and CBEF employees.

If this level of change is unacceptable to the remainder of industry then WSGA recommends selecting the CBEF model rather than the BIC model for governance and program delivery.

Honour existing commitments but move quickly to innovative incentive-and performance-based methods of marketing and promotion.

Rationale: WSGA understands the need to honour existing commitments as we transition from BIC and CBEF programs to National Checkoff Agency (NCOA) programs. However the fundamental approach to marketing and promotion used by these agencies has not changed in many years. We fund incoming and outgoing missions and co-sponsor POS materials, brochures, etc. We have salaried employees in offices around the world. This would appear to be another area ripe for innovation. We should consider incentive-and performance-based remuneration, not only for staff but also for applicants to NCOA programs.

Avoid the creation of additional industry bureaucracy entitled International Beef Trade Policy Advisory Committee.

Rationale: Effective intelligence gathering and information flow should be the outcome of a restructured agency without the creation of an additional committee. We have plenty of beef trade and industry policy advisory organizations already. All that is needed is communication between the agency and those policy organizations.

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Itisironicthatthis fracturedindustry continuestoadopt essentiallythesame governancemodeleach timeweestablishanew organization.

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