It costs money to promote Canadian Beef and finally some of this funding will be on the backs of importers. Federal Agriculture Minister, Gerry Ritz announced this morning that an amendment to the Beef Cattle Research, Market Development and Promotion Levies Order to include an import levy on beef cattle, beef and beef products. The import levy will treat importers in the same way as Canadian cattle and beef purchasers, all paying the equivalent of $1 per head of cattle.
From all accounts in conversations this morning that I have had, this announcement is being welcomed with great applaud and cheers from industry and producers. Remember that Canada is a great exporter of beef but imports from countries like the United States are also larger than many think.
According to the press release from Canada Beef Inc:
“These regulations give Canada Beef the right to collect a levy on imports of beef cattle, beef and beef products, something that has not been done before on other agricultural products coming into Canada,” says Canada Beef Chairman Chuck Maclean. “This is a significant step forward for not only the beef industry but for the Canadian agriculture sector.”
The levy allows for an equitable treatment between domestic beef producers and beef importers. Agriculture and Agri-food Canada has worked very hard with Canada Beef to obtain the information from Canadian Border Services to enable collection of the levy. Collection of the levy is estimated to be worth between $600,000 and $800,000 annually, depending on market conditions, and the organization hopes to be collecting the levy as early as September 2013.
The funds that result from the import levy can be further leveraged with industry investment, and would create a significant increase to the funding of marketing, promotion and research for the beef industry. According to Evaluating the Economic Benefits from the Canadian Beef Check-Off, a study completed in 2010 by Professor John Cranfield of the University of Guelph, dollars invested in research and marketing for the Canadian beef sector brought a return on investment of 9:1 for the beef industry.
This does level the playing field between domestic producers and importers. As mentioned to me by Anne Dunford, RealAgriculture.com Cattle Analyst, “the industry has been working on this file for a long time.”
I talked to Canada Beef Chairman, Chuck Maclean who explained to me, “since the new Canada Beef board was elected in the fall of 2012, the import levy has been the number one priority. This got done because the Federal Ag Minister Gerry Ritz made the import levy a priority,” continued Maclean. Maclean clarified that levy will be collected and put in a separate account to be used for the promotion of beef to consumers. It will not be used for the promotion of “Canadian Beef.” The promotion will be nationality neutral and be more focused on topics like the great nutritional profile of beef to consumers, said Maclean.
When you have a new influx of $800,000 with multiplying possibilities, this is a great first step forward for the promotion of beef products in general against other protein options that are Canadian or otherwise.