IT WAS a good week in a bad year for cattle producers.
The $488 million BSE federal assistance package, topped up with another $300 million if the provinces all buy in, was an 11th hour rescue for farmers facing a bleak fall calf run.
The income support and set-aside programs were welcome. Indeed, the mere expectation of a set aside gave cattle sellers the confidence to hold back stock and pressure packers to pay significantly more.
But the package was most important because it went beyond a bailout, taking the next step to officially recognize the need to fundamentally reorient the beef industry.
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Reopening the border to trade in live cattle and other ruminants caught in BSE restrictions is still a priority, but cattle producers and feeders can no longer mark time. They must find a way to restore profitability that does not depend on sending cattle to American slaughter plants.
The long-term health of the beef industry requires expanded packer capacity and diversified markets.
This package marks the first federal action to assist in those goals by backing loans for expanding packer capacity and beefing up the Canadian Food Inspection Agency.
It also addressed a weakness in the BSE surveillance effort by introducing reimbursements to partially offset costs of collecting and sending samples. Alberta announced its own program to provide $150 per head for a testable brain sample.
Federal agriculture minister Andy Mitchell must be given full marks because the program backs what the cattle industry had requested.
But the devil will be in the details.
Producer income support is being funneled through the new, untested Canadian Agricultural Income Stabilization program that many fear will not deliver adequate funds to those who need them.
The fed cattle set-aside program is designed to take the most cattle off the market for the least cost. The concept is worthy, but some worry that the largest feedlots will get the lion’s share of the money while smaller feedlots struggle.
The initiative to encourage new slaughter capacity must navigate a tricky course. On the one hand, Mitchell’s stated intention to encourage competition in the sector, now dominated by only three packers, is to be supported, but effort must also be made to ensure the new capacity will be viable even when the border reopens.
Finally, some provinces are again complaining about the 60-40 federal-provincial funding split. Producers wonder whether they will be equally supported regardless of where they live.
However welcome this package is, government’s responsibility does not end with the announcement.
With an industry and thousands of livelihoods at stake, the program’s delivery must be monitored and where necessary tweaked to ensure its success.
