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Quebec Farmers buy Levinoff slaughter plant-An Interview

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SASH

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Kevin: The deal, which saw Quebec farmers acquire an 80% majority shareholder interest in the Colbex-Levinoff, an abattoir located near Drummondville, Quebec, has caught the imagination of beleaguered farmers across the country. Gib Drury is the President of the Federation of Quebec Beef Producers…good to chat with you again…over the last number of months we’ve had a couple of emails from discouraged farmers across the country asking if we could include good news stories… your deal with Colbex came to mind right away…this is a great story in fact…but before we get into the details of this can you describe the series of events that led up to this action?
Gib: Briefly Kevin, we had a one-month campaign, media blitz so to speak, where we tried to bring the full BSE issue back onto the public radar screen. We were quite successful. We did a bunch of public events including delivering cows to city parks and offices of Ministers of provincial and federal government. It was just to get the whole issue back up to public awareness. Once we had the sympathy of the general public we were able to influence the politicians and eventually make a deal with the owner of the slaughterhouse that processes our cattle.
Kevin: Well you know a lot of people will ask and not in a derogatory way of course but say how is it that a bunch of farmers would agree on a single issue and not only negotiate but pressure a rather sizable company. What was the key?
Gib: The key was organization and having a farmer’s organization that could deliver the goods so to speak. We have a very strong farmers union in Quebec that all the farmers belong to. When you speak it is with one voice and the best comparison analogy I could make is having a bunch of rowers in a row boat and finally getting it coordinated where we all row at the same time and in the same direction. That is what we were able to achieve here in Quebec. The results speak for themselves.

Kevin: Just bring us up to date. How many farm organizations came together to speak with one voice?
Gib: Well we are already one organization called the Union Des Producter Agricole or the UPA in Quebec. We already have this one umbrella organization that represents all of us. In that organization we have dairy farmers, beef farmers and you name it; there are 40 different groups that belong to this one organization but when we move we move collectively and with great strength.
Kevin: Well there must have been some collective things happening; a lot of co-operation. Even the police were co-operative. (Laughter)
Gib: It was amazing.
Kevin: Tell us what happened there.
Gib: The police saw the strength that we had at that blockade and they were turning the trucks that wanted to deliver the cattle that Mr. Cole had ordered for his slaughterhouse. They were turning them away; they weren’t letting them get within 5 km of our barricades. They just said you don’t go down that road; these guys are just too well organized.
Kevin: Now your success was also that the provincial government was cooperative.
Gib: I don’t know whether our Minister of Agriculture, Madame Gottier, just wanted to jump on the band wagon of a good thing but she got into the negotiations with the slaughterhouse for us and guaranteed that we would get our minimum floor price that we were asking for. Mr. Cola was hesitating. He said it was too much too fast and in the long term he would agree with it but in the short term he couldn’t deliver it. So Madame Gottier our Minister of Agriculture said she would make up the difference.
Kevin: Now to give people an idea, tell us about the market share that someone like Colbex has in Quebec and in Canada.
Gib: The Quebec share – he handles 90% of all the culled cows in the province. Those are the cows that have finished their productive life. In terms of all of Canada, it is 45% of all the cows in Canada come to his slaughterhouse to be processed so it is a sizeable share of the market for sure.
Kevin: I don’t know how to ask this but why did this happen in Quebec? Are you surprised that this happened?
Gib: Not in the least. We have been talking about this in Quebec for over a year now. We have realized that there is quite a bit of money at the consumer level for food. The consumer is paying well in Canada for what they buy. They are getting an excellent product but they are putting out the bucks. The problem is that is not getting down to the farm gate. We have a deliberate policy her and we are going to go after a larger share of that consumer dollar. Our theory is that you cannot knock people over trying to get a larger share. We decided we would go in partnership with every link in the chain between the producer and the consumer. So we said first off there is the sales barns that sell our cattle; we’ll join with them in a partnership to market our cattle live. After that they go to the slaughterhouses and we said okay we’ll join with them and that was our latest step. After that the meat goes through a distribution system before it reaches retail stores and they are next on our list. The distributors will join with us in a partnership. We don’t want to take them over; we want to join with them. We’ll share the profits they are currently making.
Kevin: Now in case people listening to this aren’t aware. Give us some of the basics of what the deal actually is.
Gib: Now as you have already mentioned. We are looking at an 80% ownership of the slaughterhouse but Mr. Cola, the owner of Levinoff-Colbex, has been offered a three-year term to work with us to continue to run and manage his operation and a five-year non-competition agreement between us where he won’t start an alternative business. That is what we are trying to negotiate with him right now. We have the basis of the agreement down. We haven’t signed the final papers but everybody seems to agree that that is going to be what the final deal is.
Kevin: Let’s talk for a moment, just in your opinion I guess, what do you think the lessons learned here are?
Gib: The lesson learned here is that is light at the end of the tunnel and it is not as bleak as the way we originally thought it was. There is a way to get a fair share for everybody in this market. It requires a lot of good organization and willingness to cooperate amongst farmers and to get together and speak as one voice. Once you get over the hurdles of trying to be totally independent on your own and willing to join with your neighbour and stand united, the sky is the limit so to speak.
Kevin: Just shortly after that deal was executed I noticed that was a comment from the National Farmers Union that said the deal provided an inspiration for farmers across Canada. Just out of interest, in your opinion, do you see that this is the future to give farmers control? Do they need to be involved in the supply chain or own parts of supply chain; become more vertically integrated?
Gib: No they don’t need to. That is going to be part of the easiest way that they can get a fair return for their labour and their investment in their own farms. They don’t need to control; they don’t need to own but it sure helps to be a partner in the business because then you see the books and it is a lot harder to make unjust profits in the operation. If you are a partner in the business, you have a lot more control.
Kevin: Now this is not the first time you have done this.
Gib: And not the last either, believe you me.
Kevin: Well I guess that is my question. Do you expect; do you hope from this inspiration that we just talked about that farmers will begin to examine this more seriously?
Gib: Yes once they see that the dam has been broken so to speak. They will realize that we have tremendous power and it is concretized when you get together and use that power as one group.
Kevin: But a lot of people look at Quebec as a special case because you do speak as one group where many organization where they may be effective in the rest of the country; they don’t very often speak with one voice so they think Quebec can do it but the rest of us can’t.
Gib: The rest of you can. It is unfortunate that we have to hurt as much as we are currently hurting in the beef business to get together but I have seen as a Quebecer tremendous strides in the rest of the country to actually get together and talk to each other and that is a very necessary first step.
Kevin: Gib Drury, I appreciate spending some time with us to tell us your story, a great story. We don’t get to very often get to tell stories that are this positive which actually reflect that farmers have a little bit of control and can work together. I appreciate your time.
Gib: It has been a pleasure Kevin.
 
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