Levy on beef imports sets precedent

Monday, July 29, 2013

by SUSAN MANN

Canada’s beef industry will be the first commodity to collect a national levy on imported products and others will likely follow suit, predict federal industry leaders.

During a press conference at O’Brien Farms in Winchester, Ontario this morning, federal Agriculture Minister Gerry Ritz announced plans to introduce an amendment to the Beef Cattle Research, Market Development and Promotion Levies Order to include an import levy component.

The import levy will begin likely this fall and will charge importers $1 per head of cattle – the current levy for beef marketed in Canada. The amendment requires import levies to be the same as those imposed on domestic production.

The money it will generate – about $800,000 annually – “will help beef producers expand their markets, increase sales and fund research projects,” Ritz said.

Canada Beef Inc. (an industry organization which markets and promotes Canadian cattle and beef products worldwide), has been working with the Farm Products Council of Canada and others for about two years to introduce the import levy.

The Council, which supervises several national promotion and research agencies as well as Canada’s national supply-managed commodity agencies, finalized the rules authorizing the collection of the import levy on Monday night.

Laurent Pellerin, Council chairman, said the beef industry is once again leading the way to change rules the council administers. It was the first commodity to create a research and promotion agency in 2002. “Now they are the first to put in place this levy on imports, hoping that it will open the road for other farmer groups in this country.”

That seems to be already happening, Pellerin said in a telephone interview following the announcement. Strawberry, raspberry, blueberry, potato and pork industries are also considering promotion and research agencies, the prerequisite for qualifying for collecting import levies. "I am expecting in the next couple of months some other commodities to come along" to set up agencies under the Farm Products Agencies Act, he added.

Alberta farmer Chuck MacLean, chair of Canada Beef Inc., said the beef industry’s move paves the way for others in the agricultural industry to create “a more equitable relationship with other markets.”

The amendment to the federal order to include the levy on beef imports is, he said, “a major step in allowing the Canadian beef industry to benefit from a more equitable relationship with our trading partners.”

The organization plans to keep the momentum going and ensure the levy is collected once all procedures have been finalized and implemented, MacLean said.

Importers, who will be responsible for collecting the levy, will need an opportunity to get their bookkeeping and computers in line before collection starts. “We would like to start it in September or October but we need to make sure we have all the right criteria set up for them,” MacLean said during the press conference’s question period.

“This levy on imported cattle and beef cuts will help Canada Beef build on the great work it already does in beef promotion and research,” he said, noting the new levy will provide “a stable funding source for research, market development and promotion activities on beef and beef products.”

The Canadian Cattlemen’s Association said in a press release issued today it welcomed the levy on imports. The “move enables the levy to be applied equally to purchasers of domestic and imported cattle as well as imported beef.”

The association added that the United States has had an import levy on Canadian cattle since 1985. Now, Canada is on equal footing. BF