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The First Peek At Canada Beef

Sometimes change is inevitable. Thus the plan announced on January 7 to merge Canada Beef Export Federation (CBEF) and the Beef Information Centre (BIC) with the Canadian Beef Cattle Research, Market Development and Promotion Agency (more commonly known as the National Checkoff Agency), came as no surprise to anyone.

Up to now the checkoff agency has had only one real job, to collect and disburse the $1-per-head national levy on cattle to CBEF, BIC and the Beef Cattle Research Council. It didn’t even have much to say about how that was done. Each provincial cattle organization decided what proportion of their levy would go to CBEF, BIC and research.

Under the proposed new name of Canada Beef the old checkoff agency will be a much more powerful organization, once the amalgamation is approved. I say when, not if, because this is pretty much a sure bet.

The five provincial associations that contribute 99 per cent of the checkoff — B.C., Alberta, Saskatchewan, Manitoba and Ontario have already approved it. To become official it has only to be ratified by the boards of the Canadian Cattlemen’s Association, BIC and CBEF. The first two are made up of producers who are already onside. Some CBEF members have questioned a merger up to now but it is unlikely that they will go against the will of the producers when their vote is called.

Basically, producer organizations put up the core funds to pay for these organizations and they want one streamlined agency to promote and market their beef at home and abroad and maintain their research contributions. As with most things in life, those who pay usually get their way.

The checkoff agency is well suited to this new role. It is already authorized under the Farm Products Agencies Act so the legal transformation from a collection agency to one that collects the money and performs marketing services could be done quite quickly.

At the moment BIC has a 14-member board made up of producers and the CBEF board has nine producer directors and three packer/processors. Each has its own way of doing business and measuring results. The producers want one set of books and one set of clearly defined measures to evaluate the return on their marketing dollar. Research projects will continue to be directed by the Canada Beef Research Council.

Canada Beef, according to this initial plan, will have 12 directors: one each from producer associations in B.C., Alberta, Saskatchewan, Manitoba, Ontario and Quebec; one from the Maritimes; one feedlot rep from the province with 40 per cent of the checkoff (Alberta); two beef packer/processors; one veal processor and one representing the exporters and importers association. Producers still hold the balance of power but the regional differences will be evenly represented and packers who actually sell the meat have a firm place at the table.

The mandate calls for Canada Beef to achieve and sustain price equivalency with the U.S., and provide the same market intelligence and promotion programs as BIC and CBEF with less overhead and fewer people. A proposed budget for the change over to a single agency identified $1.3 million in savings and that included $750,000 in severance payments.

Funding is a slippery spot for the new agency. Herd numbers and checkoff revenues shrank to $6.8 million by June 30, 2010 from $8.3 million the year before. And they are sure to be down again in 2011 as Alberta’s national $1 levy remained refundable right up to the end of November. Alberta’s new mandatory $1 checkoff puts the national marketing programs on firmer footing but only until 2013 when the new levy must be renegotiated.

Checkoff money normally accounts for some 40 per cent of the BIC budget and half the CBEF budget. The producer dollars in turn determine how much the two marketing groups can request of the Legacy funds set up by Ottawa and Alberta in 2005. This $80-million fund will be down to $29 million by June and is scheduled to end in 2015.

Negotiations already have begun over a new source of funding to support the industry’s marketing efforts. At the same time we are told both CBEF and BIC are lobbying officials to pay out the last of the fund over the next two years to offset the anticipated drop in checkoff dollars.

This gives you some idea of why producer representatives are anxious to streamline their marketing and research activities, and why Canada Beef is an idea whose time has come. The sooner the decision is taken, the sooner they will be able to get on with the hard work of meshing these two organizations into a solid marketing arm for the Canadian beef industry.

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Themerger ofCBEFand BICison

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Gren Winslow

Gren Winslow is a past editor of Canadian Cattlemen.

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