Refundable checkoff pondered | ABP says directional checkoffs would be ‘worst of all worlds’
EDMONTON — It’s been more than two years since the Alberta government changed a $3 mandatory beef checkoff to a refundable checkoff, but concerns about the process haven’t disappeared.
Alberta Beef Producer chair Doug Sawyer told delegates at the organization’s semi-annual meeting to expect discussions about a possible “directional checkoff” soon.
“I may be the first person to bring it up publicly,” he said.
“It may be risky business for us, but I do believe that we are going to be discussing directional checkoff on the political level very soon.”
Under the current rules, producers can request a refund from ABP and then either keep it or voluntarily give it to another organization.
A directional checkoff wouldn’t allow producers to keep refunded check-off money. Instead, they would be forced to redirect that money to another organization.
Sawyer said he has heard rumblings from cattle producers wanting to return to a mandatory $3 per head checkoff on every animal sold to ensure all producers pay their share of research and promotional funding.
“I am not sure who is driving it out there. We are just hearing about it.”
Sawyer said ABP isn’t agitating to reopen the political discussion to change the checkoff from mandatory refundable to mandatory directional.
“To us, directional is the worst of both worlds,” he said.
“You have a mandatory checkoff that eliminates choice for producers. Secondly, it will send the money in whatever direction you can imagine. If there are 106 organizations today, if you throw some money up in the air, you’ll have 206 tomorrow.”
Sawyer said ABP used to collect $8 to $12 million a year from the beef checkoff when it went only to the organization, but that has dropped to less than $5 million a year since the legislation was changed in 2010 to make the checkoff voluntary.
The organization has received 1,000 refund requests this year totalling $2.1 million. Seventeen percent were for amounts greater than 1,000 head and represented 85 percent of the refunded money. Of the refund requests, 166 accounted for $1.6 million of the refunded money.
ABP received requests for $2.5 million in refunds last year. Of those, 149 requests were for amounts greater than 1,000 head and represented 80 percent of the money, or $2 million.
Sawyer believes producers who have left their money in the organization will insist on a plebiscite so that all producers pay for research.
He said ABP won’t lobby to reverse the checkoff. Instead, it will wait to hear what producers want.
“We believe that’s an initiative that needs to come from the producer. I am certain the producers will ask for it to be done, it’s just a matter of when.”
Brent Chaffee, chair of the Alberta Cattle Feeders Association, which lobbied for the checkoff to be refundable, said the group hasn’t asked for a directional checkoff.
“At the moment, I don’t think there is much of an appetite to revisit that legislation,” he said.
A refundable checkoff is a good way for groups to be accountable for their money, said Chaffee, who doesn’t believe there will be a serious discussion about a directional checkoff.
Some of the refunds have been voluntarily turned over to organizations such as the cattle feeders association, but much of the refunded money has been kept by producers.
“I think everyone on both sides of the fence is not putting money back into either organization,” said Chaffee.
Sawyer said what’s disappointing about the check-off changes is that less money is going into beef and cattle research, lobbying and promotion.
“Now, as an industry we have lost that money and that is a real concern,” he said.
“No matter who you think should be working for the industry, that money is lost today.”
While producers can request a refund for $2 of the $3 checkoff, $1 is still mandatory and is used by organizations like Canada Beef Inc., whose job is to market and promote the cattle and beef industry.
ABP and the cattle feeders association both have a memorandum of understanding that the Alberta money should be directed to Canada Beef. The agreement is up for review next year, when the cattle feeders association decides if Canada Beef is the best organization to help improve the livestock industry.
“We need to see the benefits,” said Chaffee.
Sawyer said Canada Beef is still developing and needs financial support from Alberta.
“They’re doing a great job. They’re giving value to producers on the ground. It’s putting money back in our wallet,” said Sawyer.
Alberta Agriculture’s Marketing Council, which is responsible for producer checkoffs in the province, says it hasn’t been approached about changing the beef levy.