HALIFAX – The government stampede to embrace crop-based biofuel as an environmental benefit and an answer to farm prosperity could put the livestock sector in peril, says a report endorsed last week by the Canadian Cattlemen’s Association.
At a Halifax meeting Aug. 17, the CCA board embraced a report that recommends the government allow more import of biofuel if domestic production threatens to short feed grain users or make prices uncompetitive.
It also recommended more study of the impacts of a public policy that favours one sector at the expense of others.
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The board decision followed two days of CCA meetings during which complaints were common about government support for the ethanol industry at the expense of other feed grain users.
Many delegates accused the government of interfering to pick winners and losers, favouring the grain sector over livestock.
“We’re not against biofuels at all,” CCA president Hugh Lynch-Staunton said in an interview. “But we don’t want consumers of grain to be competing with taxpayers’ dollars for the use of grain, so we believe the biofuels industry should be market driven.”
The report said a biofuel supportive policy could artificially shift more cattle production to the vicinity of biofuel plants to take advantage of byproducts as feed.
“Meanwhile, other producers are expected to exit the industry and an overall reduction in cattle inventories is expected to occur.”
The CCA report calls on governments to allow the biofuel industry to sink or swim based on market conditions rather than government investments, tax breaks and incentives. It calls for a re-establishment of “competitive balance between sectors.”
Increased demand for feed grain as the basis for biofuel in both the United States and Canada “will have a large impact on Canadian feed grain prices and feed costs for the beef cattle industry,” said the report prepared for the CCA.
“It is not completely understood what the net outcomes of investment in the biofuels industry will be and this is an area where further investigation is warranted.”
The cattle producers say government should establish “safeguard measures” in the event of a short crop because of drought.
These safeguards would include elimination of existing tariffs on imported ethanol, reduction of minimum ethanol use standards in Canada or reduction of government incentives to the biofuel industry.
The CCA is calling on government to put more emphasis on developing a biofuel industry that uses non-grain sources as feedstock.
Filling Canada’s mandated biofuel requirement from domestic grain and oilseeds feed stocks could consume half the production from existing corn acreage, up to 12 percent of wheat acreage and eight percent of canola acreage.
It suggests that as Canada moves toward a mandatory five percent ethanol content requirement in fuel, the government lower the tariff on imported ethanol to allow foreign supply to fill some of the requirement.
The CCA is recommending that the government put more resources into feed grain research and eliminate the kernel visual distinguishability requirement for approving new varieties.
The report to the CCA board said higher feed costs have resulted in reduced prices paid for calves and feeder cattle. And higher grain prices for biofuel will put pressure on farmers to convert fallow or pasture land into grain acreage, reducing fodder production and hurting the soil.
