Manitoba grain farmer and feedlot operator Calvin Vaags figured he had done everything right this year. He made good stock purchase decisions, negotiated good sales contracts and even planted a grain crop with prospects for an above-average harvest.
May 20 changed all that. The sales contracts for May 26 were cancelled when the border closed May 20 because of bovine spongiform encephalopathy. Money from the livestock sales is used to pay the bills on the grain side until harvest.
“I can’t access any capital until I sell cattle and I can’t sell any cattle,” Vaags told a special meeting of the House of Commons agriculture committee June 30. “I’m out of options. We’re at the breaking point.”
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Beside him at the table sat Picture Butte, Alta., feedlot operator Rick Paskal, who told MPs he has lost so much at his 40,000 head operation that he is trying to sell some land to pay bills.
“If this program stays the way it is, I’m out of business,” he said.
The program Paskal referred to is the federal-provincial $460 million BSE compensation plan that is supposed to help packers clear freezers of unwanted cuts and products and compensate cattle producers and feedlot operators for sales losses.
But a string of witnesses told MPs the program is not working the way the government said it would. It has not induced sales, restarted the domestic market nor put money into producer hands.
Only in Alberta have the first cheques been issued.
“We’ve got a program that is broke,” said Bred Wildeman of Saskatchewan’s Pound-Maker Agventures Ltd. “Widespread panic is beginning to grow out there.”
He said the Canadian Cattlemen’s Association told federal agriculture minister Lyle Vanclief before the June 18 program announcement that it would not do the job.
There was no shortage of suggestions for changes.
Wildeman and CCA vice-president Stan Eby said the industry is united in asking the government for a program of compensation for finishers willing to keep their cattle off market for now. They said up to $46 million should be taken from the $460 million total to fund a finisher compensation program, which would pay up to $60 per month per head as long as the border is closed.
Interest free loans might be useful for some sectors, including cow-calf operators, said Wildeman.
And they want the government to announce the program will not end abruptly once the border opens.
At the committee, senior Agriculture Canada official Gilles Lavoie said the government has received the proposals for changes and is considering them but has made no decisions. He said the government intends to end the compensation program as soon as the border opens, even partially.
Meanwhile, Picture Butte feedlot owner Cor Van Raay said governments should buy the excess cattle in the system and destroy what Canadians do not want or cannot eat.
And Paskal presented a proposal that government provide up to $5 million monthly to keep the cattle trucking industry alive until the crisis is over.
