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CANADIAN CATTLEMEN’S ASSOCIATION POSITION ON MARKET RECOVERY AND DISASTER ASSISTANCE, March 2004

1. MARKET RECOVERY

The most essential aspect to the recovery of the Canadian beef cattle industry remains recovery of our export markets, in particular the re-opening of the U.S. market to live cattle.

This continues to be the main focus of all the Canadian Cattlemen’s Association’s efforts. Progress has been made, particularly in achieving the re-opening of the U.S. and Mexico markets to Canadian boneless beef from cattle under 30 months of age.

The procedure for developing a rule in the U.S. that would permit the importation of live cattle under 30 months, bone-in beef and boneless beef from cattle over 30 months has also been re-started. The U.S. is accepting public comments on the proposed rule until April 7. When the comment period has ended, the U.S. government will begin assessing all the comments received, ultimately leading to a decision on re-opening the border to Canadian live cattle and other products.

2. DISASTER RELIEF

The CCA is advocating a three-pronged approach to disaster assistance.

(1) A direct cash payment on a per head basis on all cattle excluding the basic breeding and milking herds (bred cows or cattle with calves, milking cows, and breeding bulls) on inventory as of December 2003. CCA is advocating for a $150 per head payment.

(2) A loan guarantee available to all cattle producers that is:

• Interest free for up to one year or for 60 days following the opening of the U.S. market for live cattle (which ever is the shorter time period).
• Guarantee to continue for one year following the opening of the U.S. border to live cattle.

          (3) Amendments to the Canadian Agriculture Income Stabilization Program 
              (CAISP), specifically:

• Inclusion of negative margins.
• Elimination of the cap on pay-outs, currently set at $975,000.
• A direct cash payment to producers is considered the most market neutral and simple method of payment and responds directly to the delay in border re-opening caused by the discovery of the BSE-infected cow in Washington State on December 23rd, 2003. The cash payment will help stabilize the immediate crisis in the industry and will significantly reduce the future demands on the CAISP program. In addition, it will significantly offset some of the 2004/2005 year costs as it will be included as income for the current production year therefore reducing negative margins.
• In the event that Federal finances are not available to meet the target of $150 payment per head, CCA is advocating that as high a cash payment be made as possible and that the loan guarantee discussions be extended to include the provincial governments so that a program may be established that is equally available in all provinces.

3. OFF-SHORE IMPORTS

The Canadian Cattlemen’s Association is continuing to lobby the Federal Government to maintain its position that all applications for supplemental Tariff Rate Quota (TRQ) normally are refused. It is estimated this will help create a market for up to 300,000 cull cows and bulls annually.

Under World Trade Organization (WTO) obligations, Canada is required to accept 76,409 tonnes of beef each year (January 1 to January 1) without tariffs (duties) from countries that are members of the WTO, excluding countries that are covered by the North American Free Trade Agreement (NAFTA). The 76,409 tonnes of beef we are obligated to accept tariff-free is referred to as our Tariff Rate Quota (TRQ). Supplemental (additional) TRQ certificates are issued at the discretion of the Minister of Foreign Affairs and International Trade.