041018 Canada Woos Asia Beef Markets

Ottawa, ON - Canadian policymakers and industry begin a week-long Asian blitz to woo new buyers for its beef after mad cow disease crippled its domestic industry, Agriculture Minister Andy Mitchell said.

Ottawa is making good on promises to seek new buyers after the United States, Canada's main beef export market, closed its borders to Canadian beef 16 months ago after the discovery of it first home-grown case of mad cow disease, or bovine spongiform encephalopathy.

"We've indicated the importance of opening additional markets for our beef producers beyond just simply the United States," Mitchell told Reuters in an interview.

Part of the sales pitch to China, Japan, South Korea (news - web sites) and Hong Kong is to explain Canada's week-old livestock feed rules, which includes stricter regulations governing feed plants and slaughterhouses.

Canadian officials earlier this year said they hoped to unveil harmonized rules with the United States, but U.S. regulators are still mulling new livestock feed rules after they found their first case of mad cow disease last December.

Humans can suffer a fatal variant of the disease by eating contaminated beef.

Japan and South Korea insist that Canada test every head of cattle that is slaughtered, a request Ottawa has denied. Canada is, however, testing more animals for BSE.

"There's been a change in the (agriculture) ministers there (Japan) so we want to continue to urge them to open up the borders," Mitchell said.

"And on a technical levels CFIA (regulator Canadian Food Inspection Agency) has been in those countries explaining the Canadian regulatory system and that our beef supply is safe," he said.

He said he would be joined by the Canadian Cattleman's Association, the Canadian Beef Export Federation and the Canadian Meat Council.

Canada will also tell the Asian countries that it is expanding its domestic slaughter capacity to ensure supply.

"We've established a loan-loss pool of C$38 million ($30.4 million) which should lever about between C$140 to C$150 million of new investment in slaughter capacity," he said.

Ottawa's loan loss reserve offers financial institutions a pool of funds to cover risk premiums entailed in building or expanding small to mid-sized packing plants.

Cargill and Lakeside Packers in Western Canada and Levinoff in Quebec, all too large to qualify, are already expanding their operations, a federal official said.

Federally inspected plants, which account for 95% of national capacity, slaughtered 77,000 head of cattle last week. The risk-management fund aims to drive capacity up to 85,000 by year's end, 95,000 by the end of 2005 and 104,000 in 2006.

"We've made an indication that we'll expedite the process, not lessening any standards, but making sure it happens faster through a single window approach," Mitchell said.

Another C$28 million has been set aside to hire new CFIA food inspectors to oversee the extra capacity.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com