Members of an Alberta feeder association under investigation for 5,000 head of missing cattle worth $5 million have lost their $450,000 security deposit, said the provincial supervisor of Alberta’s feeder associations.
“The association is insolvent and the association is proceeding with a wind-down. All the members will lose their security deposit,” said Brad Fournier of Edmonton.
Members of the Blindman Livestock Feeder Co-op of Rimbey closed the association, which is under investigation by RCMP and two other police groups.
Police are also investigating the loss of money from the nearby Bluffton Breeders Co-op, a private feeder association.
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Under the rules of the associations, each member has a security deposit up to $10,000, five percent of the value of their livestock, but it’s not uncommon for a husband, wife and possibly children in a family to each have a separate membership.
There are several hundred members in the Blindman association, but only about half were active.
The provincial government will also lose more than $1 million in government guarantees that it offers the banks when members are loaned money by a bank through an association. There are 61 feeder associations regulated by the province.
While feeder associations do not often get into financial difficulty, it’s not unheard of. In 1998, a feeder association in Innisfail collapsed. In that case it was a small membership with a single, large member who caused its collapse, said Fournier.
The Blindman Feeder Association is a large association with several people in default of their loans.
No charges have been laid.
Fournier said feeder associations are audited each year. The association was due to be audited in March, but the RCMP was called to investigate the missing cattle before the audit.
“This caused a full and exhaustive field verification of all cattle,” said Fournier, who added that many members have questioned how a theft on this “scale and scope” occurred.
“The information provided to the previous year’s inspectors did not indicate a loss of inventory.”
BSE only played a “marginal” role in the collapse of the association, he said.
