The House of Commons agriculture committee wants the federal competition bureau to investigate the pricing practices of the meat packing industry during the past five months of beef industry crisis.
And it suggests that the Canadian government may have bungled efforts to open up foreign markets to Canadian beef and meat by not paying enough attention to Japan.
In a report to be tabled in Parliament this week, the committee said six MPs, including chair and Ontario Liberal Paul Steckle, will formally ask the federal competition bureau to investigate why consumer beef prices remained high even as the price paid to farmers collapsed after bovine spongiform encephalopathy was discovered in a Canadian cow May 20.
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The committee “believes that a specific beef processing sector should not profit unduly from a crisis that is seriously affecting Canadian cattle farmers, especially when the entire sector is receiving government aid.” A copy of the report was obtained by The Western Producer before it was presented to Parliament.
During public hearings, packer representatives explained their prices by noting they have fixed costs and had large losses in the early weeks of the crisis when processing levels fell. They also said prices on many meat cuts have declined.
However, several Liberal MPs including Steckle accused the packers of profiteering, despite a $30 million fund from governments to help them cover costs and move product.
The committee said the packers “are seen as primarily responsible for maintaining elevated retail prices.”
Only Canadian Alliance MPs have publicly distanced themselves from the blame-the-packers strategy, arguing instead that the government program was poorly designed because it did not establish a floor price for cattle.
Meanwhile, although heaping praise on the Canadian Food Inspection Agency for its fast and thorough work on the BSE issue, the all-party committee said the federal government may have mishandled the diplomatic side. It concentrated international efforts on trying to reopen the American market while putting off a trip to Canada by Japanese officials in the early weeks of the investigation.
In the end, Japan’s refusal to open its border became a major delaying factor in opening the American market.
The wide-ranging 21-page report also recommends:
- An increase in funding for the CFIA to help offset some of the increased costs of inspection and traceability rules that will be imposed. Without more government funding, too much of the added cost may land on producers, say MPs.
- That Ottawa establish a federal task force to lead the effort to open foreign markets by regularly informing the cattle industry and Parliament about what efforts are being made.
- The federal government take the lead to establish a national and affordable traceability system, in co-operation with provinces and the industry.
- That Ottawa ban specified risk materials from animal feed and then the feed system should be audited to make sure there is compliance. Although such a ban would go beyond international requirements, the committee says it would be a way to assure the world that Canada’s food is safe.
“The committee considers that going beyond ‘making an already very safe system even safer’ might be a good strategy that could eliminate all trade barriers,” according to the report.
