Alberta’s privatized Livestock Identification Services should get $6.6 million over three years from government to improve its services, says the organization.
And it wants the money to come from $8.2 million in fees the pro-vince collected and put into the general revenue fund when it started selling lifetime brands about four years ago.
“We feel this money was taken from producers and should be used for industry projects,” said LIS chair Dale Wilson, who spoke at a Feb. 22 meeting of the agriculture standing policy committee.
The meeting was scheduled after LIS officials felt they had reached an impasse with government in resolving the issue.
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The organization wants $2.2 million each year for three years to use in areas that include upgrading its computer system. With a modern system it would like to improve the inspection system and create a trace-back framework.
“Our difficulty is LIS doesn’t have a source of funding for capital expenditures,” said Wilson.
LIS has about $700,000 in the bank. Of this $483,000 came from government to cover inspection fees LIS would have earned if it had started four months earlier, said general manager Ken Weir.
The computer system alone could cost up to $5 million, said Weir, who noted the organization’s revenue now comes from collecting inspection fees.
Future discussions
The government controlled brand inspection until Nov. 1, 1998. When it started privatization discussions with LIS it agreed to discuss the brand fees, said Weir. He admits government didn’t directly say the lifelong brand money would go to LIS, but left the understanding it would be dealt with later.
“From Day 1 this has been a bone of contention. The government did indicate to us they were willing to discuss it and to come to some sort of agreeable settlement even if that may perhaps include mediation.”
The privatization deal may not have gone ahead otherwise, said Weir in an interview.
“It’s very difficult to make that statement after the fact. But certainly there were numerous occasions during the privatization where it almost fell apart.”
Ed Stelmach, agriculture minister and policy committee vice-chair, said in an interview that all players agreed to discuss lifelong brands after the deal was cemented. He thinks LIS’s wish is possible and would like improvements like a trace-back plan, but he wants to see a detailed three-year business plan first.
“I think if they deliver a good business plan and show that they do require funds they might get more. We’ll sit down and we’ll chat. The door is never closed.”
Until Stelmach receives the plan he won’t appeal for government funds.
“There’s no downside for them to struggle through this. We want to help them out but I can’t stand before the House and spend two, three, five million dollars without something in my hand saying ‘this is the business plan and this is where the money is going to be going to’. “
The government has offered LIS $150,000, which it would have to match, to study the projects it says are needed.
According to Weir, LIS already has a business plan and Stelmach’s office has a copy. The organization can’t afford to match the $150,000, said Weir.
“We’re saying that until we know there is a source of funding available, why spend the money?”
If the organization doesn’t receive the funding it needs, he said producers will suffer. Although LIS will continue to offer an inspection service, it won’t improve.
Same system, same problems
“We will bump along,” said Weir. “We will not be able to react as quickly as industry would like us and we will be stuck with a system that’s basically been in place for the last 30 years.
“What they (producers) have today they’ll have tomorrow, and what they’ll probably still have 10 years from now. They will not have any improvements.”
The organization’s next step is to wait for government response and find other avenues if necessary.
