Amajor restructuring lies ahead for Canada’s cattle industry, following a working group’s recommendation to amalgamate three national beef agencies into one independent marketing organization.
The move would see the Beef Information Centre, the Canada Beef Export Federation and the Canadian Beef Cattle Research, Market Development and Promotion Agency rolled into one super agency called Canada Beef. The new organization would research, promote and sell Canadian beef at home and abroad.
The Canada Beef Working Group, an industry-leader committee, recommended the action in a report released Jan. 6.
It’s now up to the three agencies to decide whether to accept the recommendation.
The sticking point is expected to be CBEF, which has rejected similar recommendations in the past.
But the industry needs one marketing organization instead of three disparate and sometimes competing groups, said Brad Wildeman, the working group’s co-chair.
“If this is approved, it will be one of the biggest decisions the cattle industry has made in the last few decades,” said Wildeman, a former Canadian Cattlemen’s Association president.
The 68-page working group report, five months in the making, cites numerous benefits of combining the three agencies.
It will create “a single unified marketing team” and “a multi-stakeholder board with (a) unified purpose,” says the report’s executive summary.
The report predicts savings of $1.3 million a year by consolidating operations, staff and facilities.
Those savings would come from having one board of directors, fewer staff and centralized operations.
Annual savings could rise to over $5 million when federal dollar-matching contributions are considered, said Wildeman.
Saving money is important because a national checkoff used to fund beef programs is generating less money than before, he said.
CBEF, BIC and the Canadian Beef Cattle Research, Market Development and Promotion Agency are funded by a national checkoff of $1 for every beef animal sold in Canada. Provincial associations collect the money locally and forward it to the third organization, which doubles as a national checkoff agency, for allocation.
SHRINKING CHECKOFF REVENUE
A shrinking Canadian cattle herd means the checkoff generates fewer dollars than it used to and savings are necessary wherever possible, Wildeman said.
Another concern is a checkoff controversy in Alberta, by far Canada’s largest contributor. Recent Alberta legislation made the province’s $3-a-head checkoff, which included the $1 national checkoff, voluntary. This created huge uncertainty over how much money would flow to national agencies.
The $1 national part of the checkoff has since been made compulsory again, allaying those fears.
But a special $80-million Legacy Fund to help support national programs expires in 2015, adding further pressure to reduce costs.
Having a single agency will also establish a clear demarcation between marketing and policy in the beef industry, Wildeman added.
In the past, CBEF, BIC and CCA have sometimes overlapped in what they said and did. A single organization would speak with one voice for marketing, leaving CCA to deal with policy, he said.
The report notes provincial cattle producer groups all support the single agency. Associations from B.C., Alberta, Saskatchewan, Manitoba and Ontario, which provide nearly all the national checkoff contributions to BIC and CBEF, have signed letters supporting it.
The CCA, BIC, CBEF and beef cattle research group boards will each consider the report’s recommendations. If they agree, special general meetings will be held for ratification.
After that come the nuts and bolts of dissolving existing organizations and creating the new one. Wildeman suggested this could happen by early summer.
The national checkoff agency will be spun out of the Canadian Beef Cattle Research, Market Development and Promotion Agency to act separately as the administrator for checkoff funds.
“Itwillbeoneofthe biggestdecisions thecattleindustry hasmadeinthelast fewdecades.”
– BRAD WILDEMAN