Hi All,

http://story.news.yahoo.com/news?tmpl=story&cid=1845&ncid=1845&e=13&u=/cpress/20040803/ca_pr_on_na/mad_cow_packers

Canada - Canadian Press 

Alta auditor general finds meat-packer profits tripled after mad cow crisis

Tue Aug 3, 2:35 PM ET  

DARCY HENTON 

EDMONTON (CP) - Meat-packers have nearly tripled their profits since the
mad cow crisis, but the increase isn't due to government aid, a report by
Alberta's auditor general said Tuesday. 

Fred Dunn said Cargill, Lakeside and XL Foods were making an average of $79
a head in the 12 months prior to the mad cow scare. But that jumped to
$216.52 a head following the discovery of a single case of the disease on
an Alberta farm in May 2003. 

Dunn also said the packers didn't benefit unfairly from a $402-million
federal-provincial aid program. Instead, he suggested the 281 per cent
increase resulted from supply-and-demand forces at work in a
"distorted market" in which cattle supplies significantly
exceeded slaughter capacity, while domestic and limited export markets
remained strong. 

"Not until meat-packing capacity in Canada comes into balance with
cattle supply will the market return to its previous competitive
state," Dunn said in his report. 

The auditor general said the packers co-operated with him by providing
their financial statements for the years preceding and following the
disease's discovery. 

He also noted packers said they have additional costs as a result of the
crisis, but information provided to back those claims is incomplete. 

"What is clear is that those costs have been much less significant
than the increase in their profitability." 

He estimated the total of all extra costs to be between $35 and $25 per cow. 

Dunn began his review last March after opposition parties and a farmers
group raised concerns that most of the aid money may have been used to
fatten the profits of meat-packers. 

The Alberta government was initially reluctant to pursue an investigation.
At one point, Premier Ralph Klein stormed out of a news conference
muttering, "I have had enough of this crap," when he was
questioned about the program. 

But stung by criticism of his actions, the premier made an abrupt
about-face and called on the auditor general to fast-track an
investigation. 

Agriculture Minister Shirley McClellan sent Dunn a letter asking him to
produce a report on whether public dollars spent on aid achieved intended
goals. 

Figures released by the province in June showed two meat-packing companies
- Lakeside and Cargill - received about $42 million in direct payments,
nearly 10 per cent of the total payout. 

More than 40 other companies split about $200 million. The rest was divvied
up between 22,000 Alberta producers, who received an average payment of
about $18,000 each. 

On Tuesday, McClellan said the most important conclusion in Dunn's report
is that programs to help producers worked as intended. 

"More than $400 million in BSE (news - web sites) funds moved 1.2
million cattle through the system and provided valuable cash flow to an
industry that had never experienced such a catastrophic event in its
200-year history," she said. 

The Alberta government has agreed in principle to most of the report's
recommendations, she added. 

McClellan released a departmental report last March that didn't find any
evidence meat-packers were taking advantage of the mad cow crisis, but she
admitted the aid program was flawed because it affected market prices. 

The federal government also made an unsuccessful attempt to determine how
meat-packers fared after the crisis. Three companies - XL Foods, Lakeside
and Cargill - were summoned to testify before a parliamentary committee in
Ottawa, but they didn't show up. 

Opposition Conservative MPs blocked an attempt by the government to fine
the companies $250,000 a day for contempt of Parliament. 

The beef industry has been devastated since a cow with bovine spongiform
encephalopathy, or mad cow disease, was found on a northern Alberta farm. 

The United States border has been closed for more than a year to live
cattle, although some exports of boxed meat cuts resumed last September. 

A cow with BSE found in Washington state in December was also traced to an
Alberta herd.
 


From the desk of...


   Michael
... The Western world's desire for beef has doubled the cattle population
in the past 40 years. There is now one cow for every four humans on the
planet.
- Anita Gordon and David Suzuki, It's A Matter Of Survival, 1990



 + CrossPosted in: CALGARY
 + CrossPosted in: CANACHAT
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 + CrossPosted in: POL_DISORDER
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