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Thursday February 09, 2012


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    Ranchers look to market board to end recession

    Murray Mitchell/The Daily News

    Cattle rancher Dave Chutter, centre, speaks on a panel addressing the current cattle industry melt-down. Also in photo, Dick Klein-Geltink, chair of BC Milk Producers, at left, and Gillian Watt of TRU.

    It may not quite be the best of times and the worst of times for B.C. agriculture, but the opening line of Charles Dickens’ Tale of Two Cities aptly describe a division in farming.

    On one side are B.C. poultry, egg and dairy producers who are working through a recovering economy, able to buy machinery, hire workers and pass on operations to family members. It may not quite be the best of times, but those industries are surviving with a regulated profit.

    Decades ago each of them signed on to independent marketing board systems that protect them from offshore competition, ensuring a balance between production and consumption through quotas on producers.

    “We do get a fair share of the consumer dollar,” Dick Klein Geltink, a dairy farmer and Chair of the B.C. Milk Producers told a recent cattle forum in Kamloops.

    The other tale is the worst of times for B.C. ranchers, whose free enterprise spirit caused them to reject marketing boards in the 1970s. Instead, with the advantage of Crown land for grazing, the family-based operations chose to export their high quality product and face challengers head on.

    But ranchers are now in the seventh year of a recession in the beef industry, pummeled by cheap imports from South America, trade barriers in Asia, overcapacity in North America and, lately, a worldwide recession.

    An unlikely champion has come forward among B.C. ranchers, asking them to consider pushing for what is known as supply management – the same system used by dairy, poultry and egg producers that keeps them sheltered from global economic vagaries.

    “The B.C. beef industry is not a profitable business,” said Dave Chutter, a former Liberal MLA who is promoting a shift to supply management for beef in B.C.

    “To suggest we need a handout until 2012 when prices are expected to get better is the same old story.”

    Chutter said a national marketing board for beef is not possible because of the level of co-operation needed among provinces and Ottawa as well as international trade rules.

    But he believes B.C. can go it alone, with B.C. ranchers feeding B.C. residents under a quota system that limits the amount of beef produced and keeps it for consumption within this province.

    “Let’s have B.C.-grown food, close to home,” he said during a panel discussion in Kamloops.

    But Chutter’s idea ran into a philosophical wall at the ranching forum sponsored by Kamloops cattlemen. Dave Plett, who runs a major Alberta meat packing plant, warned against intervention in markets.

    “If we’re just going to be a domestic market, which half of you in the room wants to go out of business?” asked Plett, who warned beforehand he has strong views against government meddling.

    Critics say marketing boards create an inefficient system and force local consumers to pay more.

    “Government programs are probably our worst enemy,” the president of Alberta-based Western Feedlots said in his opening statement to about 150 Interior cattlemen. “They support us when our operations are failing and give us money to operate and keep doing what we’ve been doing.”

    But feedlots, along with grocers, cutters, animal veterinarians and others associated with the industry all continue to survive, changing their price to reflect higher costs and ensure a profit.

    But cattle ranchers are at the bottom of the chain, so-called “price takers” who market spring calves at auction each fall, regardless of how much they’ll earn.

    The cattle price, according to an analysis presented by Chutter, is half the 50-year average when adjusted for inflation. Costs, such as fuel, fertilizer and machinery, he has calculated as four times higher.

    Figures on how much beef is consumed versus what is produced in the province are not readily available, something that’s frustrated Chutter. But some estimates suggest as much as two times more beef is eaten in B.C. that is produced here for market each year – making supply management possible.

    Chutter also said ranchers’ and farmers’ private property rights were taken away in the early 1970s with the Agricultural Land Reserve. They were never compensated.

    B.C. ranchers, he added, cannot compete with those in Alberta, who do not have a land reserve, operate on much larger land bases, receive larger provincial subsidies and do not face high costs of transport to market because packing plants are located there.

    Chutter said a marketing board would also encourage development of small- and medium-size slaughterhouses and feedlots — all of which would create jobs in this province.

    B.C. Cattlemen’s Association has rejected his view.

    “Once we do it, we take ourselves out of the trade and export market,” said Kevin Boone, the new manager of the Kamloops-based association.

    Boone also said consumers are not willing to pay more for B.C. beef.

    “Consumers are only willing to pay so much. You can get rid of half your producers but you’re only going to get so much for your calf.”

    Chutter said those statements about removing half of B.C.’s herd are incorrect. He’s frustrated by a lack of provincial data and unwillingness by the cattlemen’s association to keep an open mind to the idea. In contrast, many steadfast free-enterprise ranchers are showing interest in his idea.

    “A lot of people coming up to me are gung ho. I said, ‘speak to your leadership and keep the momentum going’.”


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