News release

GOVERNMENT OF CANADA REPROFILES FUNDS TO FACILITATE TRANSFORMATION OF THE CATTLE AND OTHER RUMINANTS INDUSTRY

Ottawa, June 29, 2005 - Agriculture and Agri-Food Minister Andy Mitchell today announced an important reallocation of funds from existing measures to support the transformation of the Canadian cattle and other ruminants industry into a profitable player in the domestic and international markets.

This adds momentum to changes already underway in the industry as a result of Canada's $488-million Repositioning the Canadian Livestock Strategy announced on September 10, 2004 by Minister Mitchell.

"Our goal is not simply to recapture lost market share, but to move the industry to a new level of success. We are committed to ensuring that programs and services best meet the needs of the livestock industry and will continue to adjust as necessary," said Minister Mitchell. "Our producers have worked hard to produce the best livestock in the world and they should be reaping the full benefits of that achievement."

Provinces that had expressed interest in participating in the former Managing Older Animals Program before the application deadline will now be participating in the successor program Herd Management for Older Animals Program, specifically designed to provide the flexibility to provinces to address the selective culling of older animals. This program will be offered 60:40 cost shared funding to Manitoba, Ontario, Quebec and some Atlantic provinces, to assist in rejuvenating the Canadian herd through selective culling of older animals. Discussions continue with industry groups and stakeholders to address the aging national herd.

The measures also include funding of $17.1 million to help expand Canada's slaughter capacity, with a goal of processing 100 per cent of the country's livestock production. Important modifications to the Ruminant Slaughter Loan Loss Reserve Program are being made to address specific needs of the Canadian processing sector, including regional disparities in slaughter capacity and capacity shortages for animals over thirty months and other ruminants, such as sheep and bison and niche processing.

The initiatives announced today also include financial assistance of $10.2 million to offset costs to producer organizations that maintain infrastructure related to genetic improvement of breeding animals. This two-year funding will help organizations maintain the integrity of their services, while ensuring they are prepared to resume exports as markets reopen.

The Fed Cattle Set-Aside Program, a short-term transition measure to help manage the supply of animals going to slaughter will also be extended until the end of the 2005-06 fiscal year.

An additional $80 million reallocation for the disposal of specified risk material was announced in Budget 2005.

These measures follow on the $1 billion Farm Income Payment Program announced in March of this year by the Government of Canada to help our farmers deal with immediate cash flow pressures due to record low farm income, and will help to further the work on long-term changes in the cattle and other ruminants industries. Producers of cattle and other ruminants are expected to receive over $300 million under the Farm Income Payment Program.

For more information on the transformation of the agriculture sector, visit Agriculture and Agri-Food Canada's Web site at www.agr.gc.ca or call 1-866-367-8506.

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For more information contact:

Media Relations
Agriculture and Agri-Food Canada
(613)759-7972
1-866-345-7972

Elizabeth Whiting
Minister Mitchell's office
(613)759-1059

FACILITATING THE TRANSFORMATION OF THE CANADIAN LIVESTOCK INDUSTRY

Backgrounder

The May 2003 finding of BSE in Canada has radically changed the environment in which the cattle and other ruminant sectors operate. Canada has had successes in getting some borders open to live cattle and restricted access for beef in other markets since that discovery but market access is still challenging. Our industry's largest market, the United States, re-opened its border to Canadian meat from younger animals in 2003, but that market continues to remain closed to live Canadian cattle and other ruminants as well as meat products over thirty months.

On September 10, 2004, the Government of Canada announced the Repositioning the Canadian Livestock Industry Strategy to assist the industry make necessary changes to ensure long-term viability. The announcement included a federal investment of up to $488 million to help re-open markets and reduce the industry's reliance on live animal exports by expanding Canada's processing capacity and creating new demand for value-added products. The Government of Canada is committed to reviewing and adjusting this strategy as necessary. These new measures flow from that commitment.

The immediate measures, announced today, to facilitate this strategy are intended to address critical pressures hindering industry's ability to transform and reach sustained profitability. The measures direct funding at three key areas:

Maximizing market opportunities

Restructuring the ruminant industry

Restructuring the processing sector

Restructuring the processing sector

This investment will be used to encourage further expansion of Canada's meat processing capacity for cattle and other ruminants. The goal is to have enough slaughter capacity to process 100 per cent of Canada's production on a long-term, profitable basis. Highlights include:

changes and additional funding to the Loan Loss Reserve Program to encourage investment in processing facilities, particularly those targeting older animals, other ruminants or to support investment in new technology;

extend the program to December 31, 2007;

improve coverage up to 60% for projects that target key areas, such as increasing older animal slaughter or are producer owned;

assist certain pre-construction costs, such as feasibility studies, to ensure new projects are viable.

conversion of provincially inspected plants to federally inspected plants.

assist in implementation of newer technology.

Restructuring the Ruminant Industry

This part of the plan is intended to help industry manage ongoing challenges and pressures affecting the ruminant industry so that it is better able to respond to new market opportunities.

extend the fed cattle set-aside program to help continue to stabilise the cattle market until the end of fiscal year 2005-06, if necessary;

offer contributions to provinces that have chosen to offer the Managing Older Animals Program under the Repositioning Strategy or that proposed an alternative program having the same objective;

assist producer organizations that maintain performance records and register breeding animals to help the industry ensure it is well positioned to capitalize on opportunities in markets as they reopen.

Developing markets

In addition to the support for customized research and marketing activities of the Canadian Cattlemen's Association's Legacy Fund, announced March 10 of this year, these measures provide;

marketing support to increase international sales of Canadian purebred livestock and genetics;

development of market opportunities for other ruminant industries, such as elk, sheep, goats and deer.

Maximizing opportunities

The plan will enhance an aggressive campaign to regain old markets and access new ones. The activities under this part of the plan include:

Securing market access:

increasing trade advocacy and supporting legal representation of the Government of Canada in BSE-related legal actions.

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