031019 Canadian Packers Accused of Profiteering

Canadian packing plant executives will be called before the House of Commons agriculture committee again later this year to justify their performance during the bovine spongiform encephalopathy crisis.

Committee chair Paul Steckle vowed to subpoena one reluctant packer - Guelph Better Beef - to force its appearance if it continues to refuse committee invitations to appear. BSE - WP news and updates

Steckle and other committee members accuse the packers of taking advantage of the industry crisis by lowering the price they pay for cattle while continuing to charge high prices for their products.

Meanwhile, they have received tens of millions of taxpayer dollars.

Some MPs have accused packers of "profiteering" since the May 20 announcement of BSE in one Alberta cow.

"I believe there has to be accountability when money is given to organizations, whether it's farmers, industry, whatever," Steckle said.

"In this case, we gave $30 million to help clean out the system, to provide space for better cuts, to get rid of some of those lower end cuts. We don't know if that ever happened. We don't know how that $30 million was spent, what value we got for that $30 million."

Earlier during a committee meeting, Steckle said packers are not paying fair value for cows but farmers are unable to publicly protest because they need the buyers.

"But there's a belief that there's someone highly profiteering at this moment at the expense of farmers and also at the expense of consumers, and that's an issue that has not been addressed," he said.

Last week, six New Democratic Party MPs called on the acting commissioner of the competition bureau to investigate how the program worked.

"Within the cattle industry, there is a widespread belief that processors and retailers, together with some major feedlots, benefited to a far greater extent from the BSE recovery program than the vast majority of cattle producers," said a letter from the MPs led by agriculture critic Dick Proctor.

They suggested that since cattle prices plunged the day after the $460 million federal- provincial compensation program was announced, "there may well have been collusion to set cattle prices to producers at artificially low levels."

Liberal MP Larry McCormick complained that after three or four weeks of losses after May 20, packers began to make "huge returns ... at the expense of our producers."

Not all MPs on the committee agreed with the tactic of attacking the packers.

Canadian Alliance agriculture critic Gerry Ritz said packers simply profited from a poorly designed program: "There was no floor price and they took advantage of a program design the Liberals screwed up."

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