HAVE Canadian meat packers realized excessive profits at the expense of cattle producers and the public during the BSE crisis?
The search for an answer has led to contempt of Parliament citations against Canada’s two biggest packers, who unfortunately show every sign of withholding the information sought by a parliamentary committee.
Tyson Foods-owned Lakeside Packers of Brooks, Alta., and Cargill Foods of High River, Alta., may well dodge a bullet if an election is called at week’s end, as is widely expected. In that case, the investigation, and thus the citations, are likely to lapse at least until Parliament sits again next fall.
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In fact, the packers have dodged one bullet already, when unanimity was denied in the House of Commons last week on a recommendation that would have seen fines of $250,000 each day that they refused to provide the requested financial records.
The federal agriculture committee responded appropriately to public outcry earlier this year by launching this inquiry. It sought to determine whether all packers benefitted unduly from government programs designed to assist farmers and ranchers.
Specifically, the committee requested details on profit margins, by month, for 2003, and documents explaining why packer prices for fed steers and heifers dropped by about 50 percent in the three weeks after the announcement of the federal-provincial BSE recovery program in June.
The committee has repeatedly asked for data and several packers complied. Lakeside and Cargill each time responded with questions, concerns, explanations and requests for clarification -Êbut no hard numbers.
Some say that if the packers had nothing to hide, they wouldn’t object to providing the requested data, but it isn’t that simple. Issues of privacy and civil liberty seldom are.
In one respect, it is not surprising that the packers refused to provide the confidential financial data. They have understandable concerns about privacy and loss of competitive advantage if such corporate information were to become public. As well, it is anathema to companies, as it is to individuals, to have government examine private financial records beyond those necessary for tax purposes.
It escapes no one’s attention that it is not illegal to make money in Canada. Neither is it illegal to make “excessive” profits, however that may be defined.
If packers did realize profits from circumstances surrounding BSE and the resulting government assistance, it is doubtful that they acted illegally. Rather, they may have been able to profit from a poorly designed program intended to assist cattle producers in a time of desperate need. Reprehensible perhaps, but illegal, no.
That, in turn, speaks to the need for carefully constructed programs that deliver the money only to the intended recipients.
In the case of BSE, governments acted quickly and commendably in the face of great need. Unfortunately, that same haste played a role in fund distribution that is now the focus of our question.
The entire packer profit issue also reinforces the conclusion reached by many – that the limited number of large players in the Canadian packing industry has created market vulnerability. Canadian cattle producers are so reliant on a few major players – Cargill, Lakeside and XL Beef alone handle about 75 percent of the country’s beef – that actions by those few have major implications for the many producers who provide supply.
The domestic packing industry would clearly benefit from a greater diversity of competitive players, if those players would be able to hold their own in the marketplace.
The public, and especially cattle producers, have a right to know how $1.6 billion in funds earmarked for BSE crisis relief were used, and by whom.
Ottawa is even more dedicated to that revelation in the midst of the Liberal sponsorship scandal.
But even with contempt charges, the requested data from packers is not forthcoming.
Their defiance of a body that must wield authority if it is to act for the public good has served to convict the packers in the court of public opinion.
In the meantime, the affair may have served to partially distract government from the real issue: the need to get borders open to Canadian cattle and beef.
