Acompromise on the controversial elimination of a mandatory Alberta cattle checkoff will help restore lost funding for Canada’s financially squeezed beef agencies.
Alberta’s two biggest cattle associations have negotiated a three-year agreement to bring back a national checkoff on live cattle sales in the province.
The deal will restore $1 of the previously mandatory $3-a-head levy which became refundable earlier this year. The remaining $2 fee will stay non-refundable.
The $1 levy, once restored, will go to the Beef Information Centre, the Canada Beef Export Federation and the Beef Cattle Research Council. Funding for the agencies became precarious when the Alberta government made the levy refundable earlier this year.
The deal hammered out by Alberta Beef Producers and the Alberta Cattle Feeders Association, aided by Alberta Agriculture Minister Jack Hayden, expires March 31, 2013 and is renewable upon review.
The agreement is still subject to approval by the Alberta provincial cabinet. It would have to reverse part of the bill which made the entire checkoff refundable. Hayden has recommended cabinet ratify the change.
A spokesperson for Hayden said cabinet was scheduled to discuss the matter at the Sept. 29 meeting but didn’t get around to it. There’s no word on when cabinet will meet again before the provincial legislature resumes Oct. 25.
The agreement to restore the $1 national levy is the latest development in the highly political debate over refundable versus non-refundable checkoffs in Alberta.
Previously, the $3 ABP levy was compulsory and non-refundable. A third of it was deemed a national checkoff which went to the Canadian Beef Cattle Research Market Development and Promotion Agency for distribution to the three national beef agencies.
Other provinces collect their own cattle checkoffs, of which $1 by law also goes to the agencies. Alberta is the biggest contributor because it is by far the largest cattle producer in the country.
Last year, former Alberta Agriculture Minister George Groeneveld stunned the industry by announcing the province’s cattle checkoff would be made refundable, effective April 1, 2010.
Since the $1 national checkoff was lumped together with the overall $3 levy, it became refundable, too.
Because the checkoff suddenly switched from mandatory to refundable, the three beef agencies, two of which are connected to the Canadian Cattlemen’s Association, stood to lose funding.
CCA predicted national checkoff money from Alberta would drop by $2 million a year, starting July 1, 2010.
National checkoff receipts from cattle sales are already down by $1 million over the last 18 months because of declining herd numbers. The Alberta situation only makes things worse, said Rob McNabb, executive director of the national checkoff agency which administers the funding.
The agreement, when ratified, should take effect Jan. 1, 2011. McNabb said it won’t recapture all of the $2 million lost this year but it will help agencies develop budgets for next year.
“It’ll restore predictable funding based on what we know about the cattle inventory.”
Getting the Alberta levy back will also give the national checkoff agency authority to levy imported beef from the United States for promotional and research purposes.
The U. S. has had such a levy on Canadian beef since 1985. But Canada could never do the same to U. S. beef because it lacked a mandatory checkoff in every province to do so.
Over the years, provinces one by one adopted regulations to collect a $1 checkoff and remit the money to the national checkoff agency. Quebec and Prince Edward Island were the last to do so this June.
But when Alberta’s national checkoff went refundable, the ability to levy a mandatory import checkoff was lost.
BACK ON TRACK
Now, when Alberta’s $1 levy becomes mandatory again, Canada will be back on track to collect money on beef imports, McNabb said.
The decision to partially restore a non-refundable checkoff is not unanimous. The Western Stock Growers’ Association says the refundable checkoff should be given a chance to work before making any changes to it.
In a Sept. 29 open letter to Alberta MLAs, the Calgarybased WSGA said the agreement between ABP and the cattle feeders “has now driven a political wedge into the cattle industry, causing further discontent at a time when industry was starting to regain producer support.” [email protected]
“It’ll restore predictable funding. “
– ROB MCNABB, NATIONAL CHECKOFF AGENCY