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Comment: Is it time to raise the national checkoff?

For much of this year you have read or heard about Canada’s national beef strategy, but this fall the attention of the cattle associations across the country will swing around to paying for the strategy. A campaign is being put together for provincial cattle organizations to present the argument for raising the national mandatory checkoff from $1 to $2.50 per head to producers at their fall meetings.

That seems like a big jump but the people putting this material together point out a $3 provincial levy and $2.50 national levy would have a producer paying 0.43 per cent of the receipts from a calf at 2014 prices to pay for all the lobbying, marketing, promotion and research supported by the cattle industry, 0.27 per cent on a fed animal.

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Still checkoff discussions at provincial cattle meetings don’t always hinge on the amount of dollars involved. Not everyone agrees with this proposal so it is bound to generate some discussion before it comes to a vote across the country.

This is a provincial decision. Each province has a national levy for beef on the books so they could conceivably increase the national portion of their checkoff and pass it on to Canada Beef Inc. If every province passed the increase it could become a national levy and be applied against imported beef. Last fiscal year the national checkoff agency brought in $900,000 on beef imports.

If it isn’t approved by enough provinces there will be little choice but to start cutting back on the work of Canada Beef and the Beef Cattle Research Council, the two main arms for carrying out the national strategy.

A combination of inflation, declining cattle numbers and changes in government funding have reached the point where the status quo won’t be enough to even maintain the current services let alone reach the lofty goals established in the national beef strategy.

Just one example: the second five-year Beef Research Cluster has shared funding of $15 million by the federal government and $5 million from the national checkoff plus some provincial and private sources. It’s projected the industry could not afford to sign a third Research Cluster agreement without an increase in the national checkoff.

As you may recall the four pillars of the national strategy focus on beef demand, competitiveness, productivity and connectivity.

The goal of the beef demand pillar is to enhance beef demand and as a result enhance carcass cut-out values by 15 per cent over the next five years. This was to be achieved by focusing on domestic and global marketing, market access, validating and enhancing the Canadian Beef Advantage, consumer confidence and social licence. All worthy goals but the target may need some retooling. In August the cut-out value on AAA carcasses was already up 16 per cent on last year. Of course the way the market has been correcting in the past few weeks we could be below that level by year-end.

The goal of the competitiveness pillar was to reduce production cost disadvantages compared to our main competitors by seven per cent over the next five years. This will be achieved by focusing on reducing the regulatory burden, access to competitively priced inputs, maintaining and enhancing key research capacity, and economic, social and environmental sustainability.

The goal of the productivity pillar is to increase production efficiency by 15 per cent, through focusing on genetic selection, research and development, technology development and adoption, and enhanced information flow.

The fourth pillar, connectivity, may in fact end up being the most significant leg in this four-legged strategy. The goal here is to enhance industry synergies, connect positively with consumers, the public, government, and partner industries by actively addressing industry issues.

The creation of this national strategy alone has been a major exercise in connectivity as it brought all the different sectors to the table to hammer it out. That is something that even a couple of years before didn’t seem possible. McDonald’s sustainable beef project is another example of where this new-found sense of co-ordination within the industry is already paying off.

Now we will find out if they can bring this same sense of unity to raising the money needed to keep this plan on the rails.

The $2.50 figure comes directly from this same planning process. Last summer the associations involved first hammered out the strategy, then went through each step in the four pillars to budget what would they need to put this plan into action.

That came to $9.5 million for marketing and promotion ($18 million to $19 million in total), $3.3 million for research ($11 million to $12 million). Depending on the activity as much as $6 in government or industry money can be leveraged for every $1 of checkoff collected.

If you want to learn more or have your say about this increase in the checkoff this would be a good year to show up at your provincial organization’s regional or annual meetings.

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Gren Winslow

Gren Winslow is a past editor of Canadian Cattlemen.

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