Decision paves the way for import levy on cattle

Thursday, October 28, 2010

by BRIAN LOCKHART

An Alberta government decision to make a national levy on cattle sales mandatory and non-refundable will have a positive impact on the cattle industry in Ontario and nation wide.

“I’m glad they did that in Alberta,” says Ontario Cattlemen`s Association assistant manager Paul Stiles. “Otherwise there would be a whole lot less funding to national organizations which market the product domestically, internationally, and do research.”

Alberta Agriculture Minster Jack Hayden established a $1 non-refundable levy per head after being lobbied by beef producer groups who were upset with the $3 refundable checkoff policy instituted by a previous provincial government.

The new policy will mean $1 per head from the $3 checkoff will go directly to fund the Canadian Beef Cattle, Market Development and Promotion Agency.

“Every province has checkoff,” Stiles explains. “That’s how provincial organizations are funded.”

But nationally, funds are also distributed to organizations across the country.

Ontario has a $3 checkoff collected by the Cattlemen’s Association. One dollar of this goes to the Beef Information Centre, the Canadian Beef Export Federation, and the Beef Cattle Research Council, Stiles says.

The non-refundable levy means research and marketing organizations will be able to more accurately create an annual budget based on “what we think we are going to get from checkoff income,” he says, adding they base their forecast on previous years’ information.

He adds that the decision also paves the way the way for cattle associations to charge a levy on imported cattle - a move that will bring in an additional $800,000 in funding.

The charge on imported cattle can only be done when all provinces have the non-refundable levy.

With Alberta being the nation’s large beef producing province, the levy will contribute a significant dollar figure to supporting beef agencies in the country - and apparently western farmers realize the significant impact of research and marketing with some groups worried that a refundable type of checkoff would place national beef promotion programs in jeopardy.

“Alberta beef producers took that stand that they were going to continue to pay that $1. They know how important marketing and research is,” explains Stiles.

The Canadian Cattlemen`s Association supported the decision. In an October 19, 2010 media release Association president Travis Toews said the news will “put Alberta back into the leadership role on national check-off funding for marketing and research.”

The only group opposed to the new policy was the Calgary-based Western Stock Growers Association.

The levy is expected to be implemented before the end of the year.

Although the new policy will directly affect the beef industry, other organizations are taking take note.

“We are monitoring the situation,” says Mary Jane Quinn, Senior Marketing Communications Leader at Ontario Pork.

Quinn explains that Ontario Pork is monitoring the Alberta developments because decisions made in other provinces could have a ripple effect through the industry.

Like the beef industry, Ontario Pork has a service levy that is collected on all hogs that go to market. “It is fairly standard across all non-supply managed boards,” she explains.

The pork industry is currently moving toward deregulation — a move that will be completed on December 4.

Quinn notes that Alberta Pork recently closed its Consumer Resource department.

“Certainly we do monitor the other provinces for what’s happening there,” she says. “You want to monitor the business environment for your industry.” BF