030712 Rules on Canadian Mad Cow Could Backfire Industry

Calgary, Canada - The Canadian federal government is slated to announce tougher regulations for the cattle industry as early as this week, in an effort to reopen foreign borders to Canadian beef, but industry players are concerned that the changes will add burdensome costs to their already endangered businesses.

The changes are expected to tighten controls around cattle feeding, and could go so far as to ban the use of certain cow parts -- which pose a risk of carrying mad cow disease -- from all animal feed.

But the Alberta Beef Producers and the Canadian Cattlemen's Association are warning that any changes to Canadian regulations that aren't made in lock-step with the United States could pose a serious risk to the cattle industry.

"Obviously if that just happens in Canada, if we have rules that are not comparable with those of our largest trading partner [the United States], then there is the real potential for the associated costs to harm our industry even further," said Neil Jahnke, president of the Canadian Cattlemen's Association.

"If the border opens and we've got costs significantly higher than our competitors then that's a huge problem."

Feeding costs could increase with new regulations and revenue streams from the sale of certain cow parts could dry up, industry players said.

Mr. Jahnke said his organization has been told to expect the federal Department of Agriculture to announce the changes as early as today. "We want to make sure that we have a science based reaction here," he said. "Because a knee jerk reaction that is based on fear is only going to make the situation worse."

Mr. Jahnke said he recognized the importance of getting the border open, but added that Ottawa has no assurance from either the U.S. or Japan that regulatory changes will make a difference.

Arno Doerksen, chairman of the Alberta Beef Producers, echoed the concerns. "The more the regulations vary the harder it will be to move stock across the border [when it opens], and obviously cost discrepancies are a big concern," he said.

Vern Greenshield, a spokesman for Lyle Vanclief, federal Minister of Agriculture, said the new rules will be made public within days. The changes are aimed at getting the U.S. and Japanese borders reopened to Canadian beef, he said.

The U.S, Japan and some 30 additional countries have closed their borders to Canadian beef since a single cow infected with bovine spongiform encephalopathy (mad cow) was discovered in Alberta in May.

The United States is Canada's largest beef export market, and Japan is critical because it is a key market for U.S. beef. Tokyo has threatened to ban U.S. beef, should Washington lift its ban on Canadian beef.

Mr. Greenshield said he did not know whether the U.S. intends to match new Canadian regulations.

A spokesman for the U.S. Department of Agriculture said he had no information on the subject.

The regulatory changes are expected to centre on higher risk parts of cattle (and other ruminants) knows as "specified risk materials," including the animal heads and spinal cords. The parts pose a risk to passing on mad cow, and its human corollary, a variant of Creutzfeldt-Jakob disease.

Under current regulations the "risk materials" are permitted for human consumption. This is expected to change.

More significantly, these parts are used in animal feed and pet food. Currently, farmers are banned from feeding meat and bone meal that comes from ruminants to cattle, but they are allowed to use the feed for other animals, such as pigs and poultry. Ottawa is expected to tighten rules around feed with risk ruminant parts, and is considering banning their use in all animal feed altogether. Disposing of the material would translate into a cost to farmers, rather than the revenue it currently represents when they sell it for feed.

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