Too soon to end SRM compensation warn farm groups, processors

Monday, January 17, 2011

by SUSAN MANN

Several farm groups are asking the federal government to fund another year of compensation to help pay the added costs of removing specified risk materials from slaughter cattle over 30 months of age.

Canadian Cattlemen’s Association president Travis Toews says the groups have heard the next federal government budget is expected to be tight with possible cuts. “We just want to ensure the federal government is fully aware of the implications of not funding this program,” says Toews. “The implications are that our processors are going to operate at a competitive disadvantage relative to their American counterparts.”

If that competitive disadvantage continues over time there’s risk that Canadian processing capacity will move to the U.S., he says.

The groups — Canadian Cattlemen’s Association, Dairy Farmers of Canada, Canadian Federation of Agriculture and the Canadian Meat Council — wrote federal Finance Minister Jim Flaherty requesting $17.2 million to bring the cost of processing over 30-month-old cattle in Canada more closely in line with costs in the United States. The federal government requires processors to remove specified risk material (SRM), tissue that can become infected with BSE (bovine spongiform encephalopathy) and has been linked to the spread the disease.

Toews says last year’s amount of $25 million for this program was a one-time announcement. But the farm groups want the program extended another year, although they don’t need as much money. “The processing industry has done some work to reduce their costs of disposal,” Toews explains.

This year the industry estimates the cost to remove SRM from slaughter cattle to be $27.50 per head, down from last’s year’s amount of $31.70 per head.

Toews says he expects processors will reduce costs even further next year.

Toews says Canada’s more stringent SRM regulation costs processors here $27 a head more than U.S. producers to process the animals.

Toews says the industry’s long-term goal is to “eventually get to move to adopt a regulation very similar to that of the U.S,” he says. In the meantime, a short-term solution is needed to help offset the costs of disposal and that’s why the groups made their funding request, he says. BF