Canadians Want Canadian M-COOL

[PORKER]

Cool Coming to Canada
Mark Cardwell, Freelance
Published: 3 hours ago
QUEBEC - The provincial government isn't exactly rushing to embrace a study commission's proposals for sweeping reforms in Quebec's $14.4 billion agri-food industry.

Just weeks after a government-appointed panel recommended overhauling a system that subsidizes commodity products like milk, pork, fowl and eggs, Agriculture Minister Laurent Lessard said in March that he plans to study the report -- for the next two years.

Yet the politically sensitive proposals, designed to encourage a shift toward premium products such as organic and specialty foods, have fueled debate over the future of Quebec's farm sector. They have also served to highlight differences between the province's big, established farm groups and a new breed of entrepreneurial producers.

One of the commission's boldest proposals: end the virtual monopoly of the Union des producteurs agricoles, which represents more than 90 per cent of the province's 44,000 farmers

The report also advocates a push toward "food sovereignty," to increase the proportion of Quebec-produced food in consumers' shopping carts from the current 10 per cent.

The UPA and some other big groups have panned the report. But many smaller groups, such as organic food producers and artisanal cheese makers, say the recommendations deserve serious consideration.

"The commission did a very bad analysis of the situation (and) their recommendations are simply not feasible," said Christian Lacasse, a dairy farmer and president since December of the UPA.

By contrast, Guy Debeuilleul, an economist who specializes in agri-food at Laval University, said the report "offers a lucid statement, an audacious vision and a realistic strategy for the future of agriculture in Quebec."

The report, which followed public hearings in 27 towns and cities across Quebec last year, called for phasing out revenue-stabilizing income subsidies. By sheltering producers from competition, the panel concluded, the traditional model has stifled. For Lacasse, the recommendations reflect half-baked, pie-in-the-sky ideas detached from everyday market realities.

"(Farming) is far from easy," Lacasse said in a telephone interview. "But we're confident about the future (and) our ability to build on our many successes and strengths without calling into question the whole system like the report does."

Under provincial law, individuals or groups who produce more than $5,000 worth of agricultural products a year on agricultural land must be licensed by Lessard's ministry - and automatically become members of the UPA, to which they must pay an annual fee of $500.

Farmers, who represent less than one per cent of the population in Quebec, "want to speak with a single voice, period," Lacasse said. "Suggesting anything else is a step back 30 years."

The proposal to break UPA's monopoly has overshadowed larger and more important issues at the heart of the debate over the future of agriculture in Quebec, Lacasse said.

It is "absolutely false" to suggest, as the report does, that the current system of production quotas and price supports inhibits the development of organic and niche foods in Quebec, he said.

Marcel Groleau agrees. As president of Quebec's UPA-affiliated federation of milk producers, whose 7,000 members made $2 billion in farm sales in 2007 - which represented roughly a third of all producer revenues in Quebec last year - he said he was happy the commission hearings gave him the chance to present his federation's ardent desire to see the current management, market and quota systems maintained.

"People talk a lot about the problems in agriculture but our sector is innovating and expanding," Groleau told The Gazette. He credited the current marketing system which blocks imports and allows Quebec dairy farmers, who produce 3 billion litres of milk a year - about 40 percent of total Canadian production - to sell their wares here and in other provinces.

While applauding the commission's endorsement of "food sovereignty," he said the report painted "a very negative portrait" of Quebec's agricultural sector. Many of the panel's major recommendations are "unrealistic," he said, citing in particular a call to soften rules to allow producers to transform milk to cheese and other products on their farms and to deal directly with distributors and transformers. "We need to keep and encourage the artisanal side (but) 95 percent of our agricultural base is geared for industrial production and consumption," said Groleau. "That's where all the jobs, money and research is."

A spokesperson for Montreal-based Agropur said it, too, hopes to see the dairy supply management system preserved.

"We enjoy great stability here," said Jean Brodeur, spokesman for the dairy cooperative, the biggest in Canada with annual sales of $2.5 billion and 26 plants in Canada, the U.S. and Argentina.

For her part, Annick Van Campenhoute, general manager of the Conseil des industries bioalimentaires an industry- and government-backed group that promotes new and emerging food businesses, expressed disappointment that none of the report's 49 recommendations called for government support for innovative research and development initiatives, like training programs for entrepreneurs. Such efforts are essential for the long-term health of the bio-food trade in Quebec, she said.

"The big challenge in Quebec is to follow world trends in consumer demands," she said. "People want to be more informed about what they eat and (the food industry) needs to better understand why and how they can do it better."

Debeuilleul, the university economist, said Quebec's current system inhibits innovation. He was amazed, for example, when he learned during a trip to milk-quota-free Wisconsin last fall with some commission members that the state has more than 800 specialty cheeses, many more than the number than Quebec boasts.

"They have put in place programs to encourage value-added products," he said. That diversity and innovation, he said, is missing in Quebec, where industrial-size farms are now de rigueur.

"That is a handicap in the long run," said Dubeuilleul. "The report proposes a softening of the rules and a slow transformation of the system that will allow some oxygen in."

 

[PORKER]

Farm bill fallout
Jun 3 2008
There were some tense moments but by the end of last month, U.S. politicians had essentially given the green light to their massive Farm Bill – overriding their president's decision to veto the law. And as the dust settles, two industry analysts on this side of the border confirm its contents could have a profound effect on Canadian producers.

by BETTER FARMING STAFF

Cattle producers are already beginning to feel the effects of revised Country of Origin Labelling ,COOL ,regulations, one of the bill's many components, says John Masswohl, director of international relations for the Canadian Cattlemen's Association.

Ironically, it may be expressed in an increase of cattle going into U.S. feedlots until July 15, he says. That's the deadline the country is using to allow beef from cattle born elsewhere but finished in the United States to qualify for a U.S. beef label.

New label categories mean lower prices

The new COOL regulations, which will be implemented by Oct. 1, call for the creation of three label categories for meats sold at the retail level: a U.S. label for products coming from animals born, raised and slaughtered in the United States, a multiple countries of origin for those born in other countries but finished in the United States; and a third to identify those born, raised and fed elsewhere but imported for slaughter.

It's the middle category that is likely to have the greatest impact on the Canadian beef industry, Masswohl says, because of the pressures it's anticipated to place on U.S. feedlots. In a typical Nebraska feedlot, he says by way of example, cattle from Canada, Mexico and the United States are fed together. Masswohl fears that the new COOL law will force segregation.

If it does, it will mean operators will incur higher costs when feeding Canadian cattle. In turn, they will either want to pay less for the animals in order to recoup the costs or just not buy them at all.

"Ultimately, it means lower prices," paid for Canadian cattle, he says.

Strategy to market processed beef underway

Masswohl was somewhat more optimistic about the prospects of processed Canadian beef being shipped to the United States.

While the new labelling laws apply to products sold in retail outlets they don't apply to the food service industry, he noted. The Beef Information Centre is working on strategies to take advantage of this loophole. The Centre is also looking at ways to market Canadian beef within the new retail realities, he adds.

But ultimately, these are "coping strategies," Masswohl admits, calling them inferior to the fully integrated market Canadian producers enjoyed in the past.

Moreover, Masswohl acknowledged that Canada's beef processing industry is undergoing its own hard times and may find it difficult to meet the challenge of competing in the U.S. market. He blamed the tough new federal requirements concerning the handling of materials that pose a risk to the spread of BSE, and the rise in value of the Canadian dollar which affects operating costs and labour availability.

Federal agriculture minister Gerry Ritz has warned his counterparts in the United States that the Canadian government plans to challenge the new labelling laws at the World Trade Organization and under the North American Free Trade Agreement. But such actions will probably involve a "several year" process, Masswohl says.

In the meantime, while the COOL law has been written, the technical details of how the program will work is still not clear. "We know what the law says; now how is the USDA (United States Department of Agriculture) going to interpret it?" he asks.

Bill's impact on crop production

How - or if - the COOL bill will affect Canadian crop production is also unclear, says Al Mussell, a research associate with the George Morris Centre in Guelph.

Existing programs that offer price protection for commodities such as corn and soybeans when market prices are low are returned in the 2008 bill. But Mussell doubts these direct payment and counter cyclical programs have much of an impact at a time of record-high prices for corn, wheat and soybeans. He also notes no adjustments have been made to address rising input costs.

Nevertheless, the programs have been authorized to 2012 and are uncapped. "If this situation changes and lots of people sign up and you have some combination of a price decline or a yield hit, this thing will start to pay out."

Added into the bill is a new program called average crop revenue election – ACRE for short. Unlike the direct payment program, which uses historic average yields to calculate payments, the ACRE program uses current state level yield averages to calculate protection. The new program could be "very valuable" for corn and soybean crops in some areas, Mussell says. Moreover, the program could be enough to encourage people to continue growing certain crops even if the market changes, he notes.

Mussell also suggests Canadians take note of the inclusion of specialty – or horticultural – crops as a permitted rotation crop for those covered by the counter cyclical program. It's not the only effort at including horticulture under the Bill, he says, noting for the first time, horticulture gets its own entire section. (COOL IS HERE)BF

 

[PORKER]

$300M bailout offered to producers if they help show Alberta meat is disease-free
18 hours ago

EDMONTON — Alberta is offering beleaguered livestock producers $300 million in bailout money over the next 12 months, but they'll only get half unless they're willing to help the province showcase its beef as disease-free.

Producers will have to comply with age and country-of-origin verification to qualify for a second cheque in January.

"I can tell you that cheques will only be issued after a livestock producer shows they are working within this new system," Agriculture Minister George Groeneveld said Thursday.

The first $150 million is being sent out immediately - no strings attached - to support livestock producers hard hit by high feed and fuel costs, lower prices and the soaring Canadian dollar.

The Canadian Cattlemen's Association welcomed the bailout, but immediately raised questions about why the federal government isn't doing something similar.

"It's unfortunate that this is not a national program," said association vice-president Tony Saretsky. "We have asked numerous times for the federal government to be engaged in this."

Times are tough for cattle and hog producers in Canada, and Alberta has the largest beef herd in the country. The pork industry has been hit so hard that the federal government recently moved to pay pig farmers to destroy 150,000 breeding hogs.

Groeneveld said it's getting tougher to market cattle to foreign buyers who fear mad cow disease and want proof of age and origin. Younger cattle are not believed to carry the disease.

The minister is resorting to some tough talk for producers who refuse to provide the information.

"The changes we are proposing will not be easy and many will not be popular, but they are all necessary," he said.

"Producers who are unable or unwilling to transform their business by meeting these conditions may need to consider ways to exit the industry."

Groeneveld acknowledged the federal government has been reluctant to adopt country-of-origin labelling. But Alberta wants to lead the way in meeting international pressure for tight controls on meat supplies to ensure that diseased cows don't end up in the human food chain.

"We opposed the country-of-origin label in the U.S., but we've also been told it's going to happen. Guaranteed."

Premier Ed Stelmach said some livestock producers have already gone broke or left the industry. He also said he saw the situation beginning to unfold at international trade talks in 2005.

"We allowed the Americans and the Europeans to sell us on the elimination of agriculture subsidies," he said. "But they moved billions of dollars of support from (agriculture) subsidies and put it into ethanol."

That increased corn prices in the United States and also pushed up the price for other grains used to feed livestock, including barley. Higher feed costs mean producers are actually losing money on their livestock, Stelmach said.

"You can sharpen the pencil from both sides and you won't make a profit."

Alberta is also spending $56 million this year to create a new livestock and meat agency that will implement a new long-term plan also announced Thursday.

Groeneveld said livestock producers need to start doing things radically different to stay competitive.

"Another ad-hoc program may be a much-needed Band-Aid, but it certainly is not the cure," he said. "In many areas, the situation is as bad or even worse than it was during the BSE crisis five years ago."

The new Alberta livestock plan calls for a new trade strategy, expanded animal health surveillance and a mandatory tracing system for disease control.