Checkoff refunds will just become part of the marketing process.
We have all heard those sayings – “You reap what you sow,” “Be careful what you wish for you may get it,” and my favourite old Dutch saying – “If you burn your butt you have to sit on the blisters.” All of those witticisms seem to be appropriate for the Alberta minister of agriculture and his political allies in the Beef Industry Alliance to contemplate.
Those thoughts came to mind after witnessing the Alberta Beef Producers (ABP) at its semi-annual meeting make deep draconian cuts to its budget as a result of the minister arbitrarily terminating the ABP non-refundable cattle checkoff. Those cuts of 50 per cent and more will affect the programs that have benefitted the cattle industry the most – the Beef Information Centre, Canada Beef Export Federation and research.
It will put the Canadian beef industry at a tremendous marketing disadvantage against our major export competitors the USA, Australia and New Zealand – all of whom have mandatory non-refundable checkoffs. They must all be chortling with glee at seeing a competitor cut its own throat. Is this what the minister meant when he said that the cattle and beef industry cannot go on doing the same thing and must change?
The minister and the BIA have what they wanted – a non-refundable checkoff and a crippled and chastised ABP. The consequences will soon be arriving. Will the minister and the BIA be stepping up to the plate to replace the promotion and marketing program funding that will be lost in this duplicitous exercise? The loss of millions in funding and the demise of domestic and international marketing programs will clearly be the fault of the minister and the BIA.
Maybe there is a Plan B. Will the Alberta Meat and Livestock Agency (ALMA) come to the rescue? It still has a few million left and will probably use that cash to prop up the existing programs, being that outside of age verification, it has nothing different to offer producers. ALMA folks have even stated that they see themselves more as a funding agency for other programs and initiatives rather than doing it themselves and reinventing the wheel.
But it doesn’t take a genius to figure out that government cash will soon run out and with declining tax revenues, ALMA is unlikely to get more funding except to keep itself alive. You can then expect ALMA to press for a mandatory non-refundable checkoff for itself – just like the Australian model.
What about the BIA folks now that they are in the political driver’s seat? Do they have a plan? It would seem their only plan was to get rid of the checkoff and show their political
muscle. They succeeded, but if they and the minister thought that by stomping on the ABP was somehow going to make everyone happy campers they have curious idea of human nature.
Some apologists from government and the BIA claim that refunds will be minimal and life will go on as before. They why was this exercise necessary? Everyone else is convinced the loss of checkoff funds will be real especially in tough cattle markets, which seems to be all the time.
Let me pose this reality: cattle industry marketing insiders note that most fed cattle marketing is actually controlled by about a dozen feedlots, dealers and marketing managers. They compete amongst themselves at both ends and are essentially margin players. When the checkoff was non-refundable the playing field was level. Now that it is refundable it becomes a marketing tool that can easily affect how margins are determined.
These insiders suggest that some operators could offer to retrieve the refund for cattle sellers or require sellers to sign over the refund as part of a custom feeding contract. The point is this – competition will factor the refund into the marketing price and act as a sales incentive. That will require all the marketing players to offer it if they want to stay competitive. Checkoff refunds will just become part of the marketing process. It’s just human nature – everyone likes a refund, especially if someone else offers to do all the paperwork.
DELAY FIVE YEARS?
This may be wishful thinking of course – but wouldn’t it be helpful if the minister called a time out for some sober second thought? I am not suggesting that the decision to end the non-refundable checkoff is a mistake. From experience we all know that politicians and bureaucrats won’t admit to that, but the minister could delay the implementation of Bill 43 for say, five years. That would at least give agencies like BIC, CBEF and research some breathing room to continue and expand their good work. It could also act as an incentive for all cattle producer groups and the minister to come to some common sense resolution about governance and funding of national programs.
A delay in implementation would also put the onus on the BIA to come up with a plan. It has gotten off far too easily in this whole checkoff debacle. Platitudes about accountability and governance just don’t cut it when they have no viable alternative, except as cheerleaders for government schemes and dreams. By delaying implementation and indicating that he is willing to compromise, the minister would also show the overall agriculture industry that he is not in the pocket of a few hundred cattle feeders and ideologues. That would be leadership.