WHEN it comes to an issue as complex and controversial as the debate over Canada’s beef market post-May 20 and the discovery of BSE, the political debate usually offers little more than stark contrasts.
In Ottawa and provincial capitals during the past 10 months, the debate has often been brutal and lacking in nuance. Politicians often are best when trying to pin the blame tail on the appropriate donkey.
As Parliament Hill hearings on the post-BSE economy unfolded since last autumn, it became a three-sided argument.
Packers, supported by the Canadian Cattlemen’s Association and the George Morris Centre, insisted they have been blameless entrepreneurs and not villains taking advantage of a weak cattle sector to make excess profits. Retailers have insisted they remain a low-margin business that has promoted the beef industry and has not made undue profits despite low cattle prices and relatively stable beef retail prices.
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And many of the politicians around the table claimed to be the voice of producers victimized but afraid to speak up – producers whose income crashed, whose cattle were worth little at sale but gained value through the food chain and who received little benefit from government’s $1.6 billion response to the crisis.
The arguments have been stark, white hat versus black hat. Who to believe?
A good starting point is the report of the House of Commons agriculture committee tabled in the Commons April 1 and available on the parliamentary website. It surely is not the wisdom of the ages, since the debate is ongoing and committee members are demanding the financial records of the packing companies to back up their claims of normal profits.
Still, it is a remarkably sensible and articulate document that analyzes market trends, supply problems, market inequalities and government policy flaws. It answers some questions.
Instead of being a political document with a point to prove, it is an analysis that actually tries to shed light.
Packers are not demonized but neither are they exonerated. There are doubts about their claims of average profits and serious concerns about the market power of largely American-owned companies.
MP suggestions of packer collusion are not addressed, a sign that committee researchers found no credible evidence.
Governments are praised for their assistance to the industry but chastised for the design flaws in their programs. By setting deadlines and not making it clear who would get the assistance, the government often became part of the problem.
And there can be no better an explanation of the flaws in the free trade deal upon which the Canadian cattle industry based its expansion than this: “Without any implementation plan of the formal international rules for resolving the food safety and security problem, international negotiation is required. In such a situation, the ear of the U.S. regulator will favour U.S. cattlemen who gain a premium on their slaughtered cattle without competition from Canadian cattle, over Canadian diplomats.”
Then the clincher: “U.S. cattlemen vote for their president, congressmen and senators while Canadian diplomats do not. The calculus of the political decision is that simple.”
The committee report is good background for anyone trying to figure out what is going on and why.
