Checkoff results come home to roost

Many felt it was just a matter of time, but the ramifications of Bill 43 are coming home to roost.

Many felt it was just a matter of time, but the ramifications of Bill 43 are coming home to roost.

You might remember that notorious piece of legislation — it’s the one that ended the non-refundable checkoff for cattle, sheep, hogs and potatoes.

It was pushed through by the ag minister of the day without a referendum to appease the powerful and well-connected feedlot operators lobby. It was so clumsily done, it also eliminated the $1 national non-refundable checkoff — which the government later had to reinstate. In a futile attempt to make it look less like a gift to the feedlot operators, the minister threw the other commodities into the legislation, which of course was a complete surprise to them, because no one within their industries was asking for a non-refundable checkoff.

At the recent ABP AGM, the checkoff issue came roaring back to life with a number of resolutions demanding that the provincial government reinstate the non-refundable checkoff. That would be because the ABP has seen a whopping 30 per cent checkoff refund request.

The ABP already has made cutbacks to programs and research projects. That has a serious consequence, being many of those activities are funded by matching government grants. What has now become serious is the financial consequences on the Canadian Cattlemen’s Association (CCA), to which the ABP has been the main contributor.

The problem for the ABP is that it has agreed to pay a proportional share of the CCA budget. That contribution is not based on ABP’s retained per head checkoff income. It means the CCA share of the ABP budget actually grows when ABP overall checkoff income declines because of refunds. At the rate the decline is going, most ABP income will soon be going to maintain the CCA.

Most folks who have any understanding of the machiavellian politics of the Alberta cattle industry pretty well knew this was going to happen.

Most of the checkoff refund requests are coming from the big feedlot operators. That was entirely predictable, being that sector has fought and lobbied long and hard for a refundable checkoff.

To be fair, at times when feedlot operators are losing money on every head they sell, it helps when they get their $2 per head checkoff back — that’s only human nature.

However, the irony is that one of the reasons prices have been depressed is the direct result of COOL stifling and depressing Canadian cattle marketing — and the only way that battle can be fought is by the CCA with a healthy war-chest. But that needs to be supported by checkoff funds, which many Alberta feedlot operators are demanding be refunded to them. You can see something is amiss here, and those not demanding refunds are getting fed up with having to pay the whole bill, particularly for those that seemingly benefit the most from CCA lobbying.

Whether you are for or against the refundable, everyone would agree it’s in the hands of the Alberta government — they created the impending checkoff funding crisis and only they can fix it.

But there is a political opening to do just that — the ag minister and many of the senior bureaucrats that ended the non-refundable checkoff are now gone.

One would expect that the present ag minister and new senior staff can comprehend the negative consequences of Bill 43 to the cattle industry, not just here, but potentially across the country. As the cattle herd declines and refunds increase, it’s only going to get worse.

Repealing the act would be the right thing for the government to do for the industry.

The feedlot sector also needs to revisit the refundable checkoff issue. They are a sophisticated group that should understand the strategic nature of such issues as market access, trade restrictions and industry regulations.

They know what needs to be done and what is needed. They should be in the forefront of supporting the CCA in its battle with those that threaten the economic viability of the cattle industry here or abroad.

But instead, they are seen by many to be undermining the industry with their fixation on the refundable checkoff. They need to do the right thing by being the industry leaders they are and support a return of the non-refundable checkoff.

— Ahead of the Heard

 

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