Cattle producers’ security fund under consideration

A proposal to establish a Saskatchewan cattle producers’ assurance fund is now in agriculture minister Bob Bjornerud’s hands.

The plan, which was developed by the Saskatchewan Stock Growers Association, sets out how a fund could help producers who aren’t paid when livestock dealers go under.

Although dealers carry bonds, the amounts aren’t usually large enough to pay everyone involved.

Bjornerud has said he supports a fund if industry wants one. It’s not known how long he will consider the SSGA proposal.

Industry support appears variable. Producers attending the SSGA and livestock loan guarantee program annual meetings have passed resolutions of support.

The Saskatchewan Cattlemen’s Association debated a motion at its recent annual meeting that Saskatchewan develop a fund similar to Alberta’s. However, it was lost.

Bill Jameson, SCA director and long-time cattle buyer, told the meeting that such a fund takes the onus off the seller to make sure deals are made with reputable dealers.

Others wanted more clarification on how the fund would work and what happens if it grows too large.

SSGA general manager Chad MacPherson said there are two ways to collect money for a fund: a check-off or a levy collected at brand inspection.

“We’d like to see a levy collected at brand inspection,” he said. “You’re going to get higher revenue and it won’t be refundable.”

The suggested initial levy is 20 cents per head. MacPherson said the fund would take years to build to $5 million, which would make it sustainable.

The proposal asks the province to backstop the fund until that happens.

The fund would compensate producers to 80 percent of the sale value of their animals.

Producers would make their first claim against the bond held by the dealer and subsequently access the assurance fund.

MacPherson also said the levy could be reduced if the fund grew large enough.

The idea of an assurance fund has been raised in the past. MacPherson said there have been five cases in the last 10 years of companies going under.

Producer losses have totalled $3 million.

The latest push came after G & M Livestock of Manitoba ceased operations about a year ago without paying producers.

Total losses at the time were estimated at $1 to $1.3 million.

Although the RCMP said at the time that it was looking into several complaints in Saskatchewan and Manitoba, a spokesperson said last week he could not confirm RCMP involvement at this time.

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