BSE Take-Note Debate

Statement by David Kilgour, MP for Edmonton - Mill Woods - Beaumont

House of Commons, Ottawa

07 October 2004
 

Mr. Chair, as many people have said here tonight, there has never been a more urgent time for all levels of government to start addressing the problems that we have heard about tonight and finding intelligent solutions to the continuing BSE crisis which is hurting tens of thousands of families across this country.

    A good many producers are becoming more frustrated at not being consulted on how the crisis should be dealt with. The federal and provincial governments have worked with industry organizations, such as the Alberta Beef Producers and the Canadian Cattlemen's Association, but some producers say that those organizations do not represent them at this particular time on this particularly vital issue.

    They complain that the various government initiatives to lessen the impact of BSE have disproportionately aided large meat packing concerns and ensured a consistent oversupply of cattle at low prices at the expense of producers and taxpayers. Cargill and Lakeside, for example, have been doubly compensated since they received $42 million after June 2003 while simultaneously benefiting from the oversupply of cattle caused by producers lacking access to the U.S. slaughter facilities.

    Those who operate independently in the feedlot centre say the current situation is increasingly untenable, as colleagues know. Even with the funds that they have received from the CAIS program and other government initiatives, they are facing increasingly hostile lenders. One feedlot owner from Alberta expressed the following yesterday:

The real story of what farmers are feeling out here on the ground is not getting through to the people at the top, whether it's politicians or industry spokesmen. The banks are starting to put the death grip on some of us out here, especially the independent operators who feed exclusively their own cattle and do not custom feed for packers or Americans like ourselves. We need government to tell the banks to back off.

    Without more assistance soon, some operators, as everyone in this House knows, will be forced to sell their operations to buyers from the U.S., who will benefit by picking off their farms at low prices and filling them with artificially cheap Canadian feeder animals.

    Feedlot operators have also indicated to me that a 10% cap must be imposed on packer ownership of cattle. Without this the large packers are free to purchase feeders at currently depressed prices from thousands of cow calf operators, and then to contract them out to a select number of custom feedlots to be finished. At the same time that packer owned cattle are finishing, privately owned ones are doing so as well.

    The large meat packers have no obligation to buy from private feedlot operators and can thus offer lower and lower prices to those who are anxious to get rid of their inventory, since the finished cattle in their possession are costing them money for maintenance and losing value as they become older and heavier.

    The situation in regard to cull cows has been especially bad since they cannot be marketed domestically due to a lack of processing capacity. Nor can they be exported as live animals because they are more than 30 months of age. This has put many feedlot owners in a very severe predicament. They cannot sell these animals due to the lack of domestic slaughter capacity and yet they cannot afford to keep them as they are incurring maintenance costs on them, and banker's interest, with each passing day.

    Although the new aid program announced in Calgary pledges money to support initiatives to increase domestic slaughter capacity, it has proven problematic for those attempting to secure financing to build plants to slaughter animals over 30 months of age. The current proposal is simply unworkable they say, because no financial institution will agree to accept a 60% liability for losses on loans which they deem to be high risk. This problem must be solved soon because if it is not, very little if any new slaughter capacity will come on line to absorb the glut, or the wall of beef as it has been put, and a lot of money will simply go to waste.

    One key lesson we can all take from this crisis is that Canada needs to diversify our exports, as other members have mentioned. Canadians consume about 28% of our production. The rest must be exported. In the past the customer of choice of course has been overwhelmingly the United States. With the U.S. refusing to accept live animal exports; it becomes exceedingly urgent that Canada find other markets for beef. Australia, by the way, exports its beef to more than 100 countries.

    Before foreign customers are willing to accept our beef, their consumers need to know--we know it but they need to be assured--that it is safe. Providing meat packers with the regulatory and financial support to allow them to implement private BSE testing systems as part of their operations would provide this assistance.

    There have been arguments, as we all know, about how private testing is unnecessary and expensive, but the reality is that foreign consumers require assurances concerning the safety of our beef, which they are currently not getting. Japan and South Korea have already indicated that they will accept Canadian beef exports provided all animals are screened for BSE. I believe the added cost of setting up regulatory and support for private testing is a small price to pay in comparison to the almost complete lack of access that Canadian beef is faced with at present.

    Through private testing, we have the opportunity to turn tragedy into triumph. Once Canadian meat packers begin testing privately for BSE, they will be able to boast that Canadian beef is not only the best in the world but it is also the safest. That in effect would be a huge competitive advantage for Canadian beef and it would help the industry to thrive.

    Finally, reopening the U.S. border is not the panacea to the troubles of the beef industry that some seem to think, although we all want it open. Without a strategy for diversifying the customers of Canadian beef, history could end up repeating itself. We could once again be faced with a situation where one BSE-positive cow, as the Leader of the Opposition pointed out, would threaten to destroy our entire industry again.

    Producers have recognized that getting the U.S. to allow Canadian beef will not ensure the long term stability of the beef industry. Let us support their efforts in finding a lasting solution rather than trying to impose one on them.

    Allow me to end with this plea for help from a Ponoka region producer. She said:

This is an emergency call...Farmers are getting more disillusioned every day...we have a wealth of knowledge and know-how that needs to be passed down to the next generation that is going to feed the world, and yet there is no one to stand up and do the job...When we all go broke from trying, or die from broken hearts and broken spirits, all Canada will be losers.