A $460 million support program designed to help cattle feeders affected by the U.S. border closure has funneled money into the hands of only a few cattle feeders, mostly in Alberta, the Western Producer has learned through an Access to Information request.
In the first series of payouts in Alberta, 123 feedlot owners received the first $18 million under the federal and provincial BSE Recovery payment program announced June 18.
One Alberta feedlot owner received $4.9 million of the total made available to Alberta owners up to Aug. 6, about half way through the program. The second largest payout in Alberta is $1.3 million.
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In Saskatchewan, one feedlot owner received almost $1 million of the total $6 million paid to more than 400 producers up to Aug. 19. Names of recipients were not released.
Figures for Manitoba were not available at press time.
Ken Nicol, leader of the Alberta Liberal party, said the program was flawed from the beginning. Instead of spreading the $460 million evenly to affected cattle producers, the program was designed to silence complaints from feedlot operators.
“They tried to put money into what, in effect, was the squeaky wheel, the feedlot operators, that were yelling the loudest right off the bat,” said Nicol, MLA for Lethbridge East, in the heart of Canada’s largest feedlot sector.
“This program has to be the worst thought-out support program of all of the ag support programs I have studied in 35 years of ag policy work,” said Nicol, a former University of Lethbridge agricultural economist.
In Alberta, 69 percent of the 650,000 cattle on feed in Alberta as of May 20 were covered under the BSE program. In Saskatchewan, 26 percent of the 118,000 cattle on feed received money under the program.
“The whole equity thing is a major issue,” said Hal Cushon, an assistant deputy minister of agriculture in Saskatchewan.
He said large packing plants decided whose cattle got slaughtered. Only slaughtered animals were eligible for recovery program payouts.
“In the end, the packing plants made hard business decisions of who was important to them this month, next month and five years from now,” said Cushon.
John Ross, assistant director of the red meat section with Agriculture Canada, who helped design the BSE program, said the federal government had a limited amount of money it was able to spend on the program.
He also said Ottawa was forced to redesign the program or it would have been on the hook for 90 percent of the price before the border closed.
That would have forced market prices to drop to zero, he said, and the federal government would have had to buy most of the 900,000 head of cattle on feed when the border closed.
Ross said the federal government was also worried that if it paid for 90 percent of the drop in prices, it would have instigated a trade action from the United States.
Alberta Agriculture minister Shirley McClellan also questioned the program design.
“The first slaughter program, I believe, would have been a better program if it had an adjustment period in it,” said McClellan, who stressed the need for a phase-out period to create an orderly marketing of cattle.
“However, our partners in the program, who funded a portion of the program, didn’t agree. So that terminated and it led to the opportunity for some very low prices and panic selling at the end,” said McClellan.
