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Cca Reports – for Mar. 14, 2011

In early January, the Canada Beef Working Group (CBWG) released its report and recommendation to create a single independent national beef cattle marketing and promotion organization.

The CBWG consists of representatives from the Beef Information Centre (BIC), the Canada Beef Export Federation (CBEF), a Cattle Feeders representative, and a representative from the Canadian Beef Cattle Research, Market Development and Promotion Agency, commonly referred to as the National Check-off (NCO) Agency.

The proposal the CBWG presented to industry sought to address an issue first raised in 2008, when the Canadian Cattlemen’s Association (CCA) received a request from its provincial members to facilitate a study considering the merits of amalgamating the beef industry’s main marketing groups.

Responding to the request of its provincial members, the CCA facilitated two in-depth studies that considered the merits and risks of combining domestic and international marketing efforts under one organization. Both studies concluded that while both CBEF and BIC have been relatively effective, by amalgamating operations significant benefits and efficiencies could be realized.

The CBWG report recommends that the NCO Agency be the home for the amalgamated market development and promotion operations. The NCO Agency would need to be restructured to enable the creation of this single organization. Following that process, the new entity would then assume the responsibilities, programs and core functions of all three organizations.

The new organization would utilize the authority of the NCO Agency and focus entirely on marketing initiatives. Research responsibilities would continue to be assigned to the Beef Cattle Research Council. Intelligence gathering on markets and identification of market access issues would be maintained through the creation of a special advisory committee. However, the advocacy of policy would be left to policy organizations outside of the new organization.

In recognition of the benefits of broad industry perspective and expertise, the board structure of the new organization will see each provincial producer organization from Quebec west appoint or elect one representative to the board.

The Maritime organizations would collectively appoint or elect one member and Alberta, due to the size of its industry, gets a second representative which would be appointed from the feedlot sector. The two large packers, the veal association and one importer will each have a seat at the board.

In order to ensure appropriate expertise and industry perspective, up to four more board members could be appointed. This would provide the opportunity for representation by smaller processors or other industry players. The intent is that the board will strike a balance by ensuring accountability to producers who fund the initiative and that the board also has the appropriate expertise.

The CBWG proposal would result in an estimated annual savings of $1.3 million, funds which would be re-allocated to enhancing programs delivered by the new entity. The estimated cost of the amalgamation is also $1.3 million. In one year, we will effectively have paid for the costs of amalgamating into a more efficient structure that will serve the interests of producers for years to come. During the transition, existing programs and initiatives will continue, with a goal of minimizing disruption of services.

It is interesting to note that in the hours following the CBWG presentation to industry, provincial associations in B.C., Alberta, Saskatchewan, Manitoba, Ontario and P.E.I. issued a joint statement that they were unanimous in agreement to take the report and recommendations back to their respective provincial boards to seek their approval in moving this initiative forward in an expedited manner.

A month later, the CBWG recommendation to create a single independent national beef cattle marketing and promotion organization had received full support from stakeholders.

Provincial cattle associations in P.E.I., Ontario, Manitoba, Saskatchewan, Alberta and B.C. as well as the B.C. Cattle Industry Development Council had all approved the CBWG proposal to combine the three organizations.

These core funders represent 99 per cent of total national checkoff contributions to the existing marketing groups of BIC and CBEF.

Additionally, the principle organizations directly impacted by the proposal had by mid- February approved or were in the final stages of their approval process. The NCO Agency, BIC Committee and the CCA executive have all passed resolutions supporting the consolidation. The CBEF board of directors has also strongly approved the consolidation proposal and was to present it to their members at a special members meeting later that same month.

Once all industry responses have been received the CBWG will proceed with next steps including signing of the Consolidation Agreement, appointment of board members, recruitment of a president, and the proclamation and bylaws of the new organization under the Farm Products Council of Canada. In the interim, CBWG members said it will be business as usual and current programs and services continue.

In spite of the overwhelming industry wide support of the CBWG recommendations, a few vocal detractors remain. In my opinion, there is an overwhelming rationale to amalgamate under a new organization that will focus synergies on marketing programs that add real value to the bottom line for Canada’s beef cattle producers.

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TravisToews ispresidentof theCanadian Cattlemen’s Association

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