Voluntary Report - public distribution

**Date:** 4/14/2005

**GAIN Report Number:** CA5027

CA5027

**Canada**

**Agricultural Situation**

**This Week in Canadian Agriculture, Issue 14**

**2005**

**Approved by:**

![](media/image1.wmf)Gary C. Groves

U.S. Embassy

**Prepared by:**

Christina Patterson and George Myles

**Report Highlights:**

\* U.S. Mad Cow Cover-Up Allegations Receive Wide Attention \* Canada
Expects Taiwan to Accept Canadian Beef Soon \* Cattle Industry Promotes
Birth Date Registration Process to Assist Age Verification \* Farmers
Launch C\$7 Billion BSE Lawsuit \* Canadian Government Roles Out Kyoto
Plans For Agriculture and Forestry \* Will Canadians go to the Polls? \*
Forestry Industry Sees Profits Increase

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Ottawa \[CA1\]

\[CA\]

This Week in Canadian Agriculture is a weekly review of Canadian
agricultural industry developments of interest to the U.S. agricultural
community. The issues summarized in this report cover a wide range of
subject matter obtained from Canadian press reports, government press
releases, and host country agricultural officials and representatives.

*Disclaimer*: Any press report summaries in this report are included to
bring U.S. readership closer to the pulse of Canadian developments in
agriculture. In no way do the views and opinions of these sources
reflect USDA's, the U.S. Embassy's, or any other U.S. Government
agency's point of view or official policy.

**U.S. MAD COW COVER-UP ALLEGATIONS RECEIVE WIDE ATTENTION:** A former
USDA veterinarian, now a consumer advocate, who has been insisting for
years that bovine spongiform encephalopathy (BSE), or mad cow is present
in U.S. cattle herds, came to Canada this week to deliver the news and
was even invited to testify before a Parliamentary Committee. Speaking
across Canada, Lester Friedlander alleges that USDA veterinarians sent
suspect cow brains to private laboratories, which confirmed they were
infected with mad cow disease but that subsequent tests in government
labs were free of any BSE agents. Following up Friedlander's
allegations, the Canadian Broadcasting Corporation (CBC), a publicly
owned media network, launched an investigative probe of the incidents
that allegedly occurred in the 1990s. The CBC procured a video of a
disabled and downer animal at a slaughterhouse in Oriskany Falls, N.Y.,
which it broadcast on national television. The CBC also claimed it has
U.S. lab results that according to notes from the scientist who
conducted the test, so much of the brain was missing that the test was
compromised. The declaration of the outbreak of BSE in Canada in May
2003 and two additional cases in Canada in January 2005 has reportedly
cost the Canadian beef industry an estimated C\$7 billion in economic
losses due to trade restrictions and market disruption. Ever since
Canada's 2003 BSE incident, abundant anecdotes and cartoons have
circulated in the Canadian media that portray various methods of how
U.S. ranchers and officials cover-up potential BSE findings.

**CANADA EXPECTS TAIWAN TO ACCEPT CANADIAN BEEF SOON:** According to
trade policy officials at Agriculture and Agri-Food Canada, Canada
expects Taiwan to be open to Canadian beef soon, but no date has been
set. GOC officials were recently in Taiwan meeting with Taiwan's
Minister of Agriculture and Health. Effective April 16, 2005 Taiwan is
accepting U.S. boneless beef from cattle slaughtered in the United
States at an age under 30 months. Prior to BSE trade restrictions,
Canadian beef exports to Taiwan totaled about \$12 million and Taiwan
was the fifth most important export market for Canadian beef.

**CATTLE INDUSTRY PROMOTES BIRTH DATE REGISTRATION PROCESS TO ASSIST AGE
VERIFICATION:** The Canadian Cattle Identification Agency (CCIA), the
industry-led organization that administers Canada's cattle
identification (ID) and traceback system claims it has enhanced its
database capabilities to include Age Verification capability. In Canada,
the ID ear-tag program is mandatory for all producers and the CCIA has
introduced a voluntary process for producers to electronically submit
cattle birth dates and associate the information with the identification
numbers on approved CCIA tags applied to cattle. All submissions are
done on the Canadian Cattle Identification Agency's Age Verification
website. To ensure data accuracy, the birth dates entered are subject to
a third-party auditing process to begin soon. According to Stan Eby,
President of the Canadian Cattlemen's Association, the Canadian Food
Inspection Agency has stated that it strongly encourages producers to
submit birth date information and that the issue is a key strategy in
the effort to open up the Japanese market and position Canada as one of
the few beef exporting nations to be able to provide age-verified beef.
In a statement, Eby encouraged all Canadian producers to help the
Canadian industry recover (from BSE) and become even more competitive by
registering the birth dates of their calves.

**FARMERS LAUNCH C\$7 BILLION BSE LAWSUIT:** Farmers from Ontario,
Quebec, Alberta and Saskatchewan have filed a C\$7 billion class action
lawsuit against the Canadian government claiming that government
negligence resulted in Canada's BSE crisis. The group alleges that the
federal government lost track of cattle imported from the United Kingdom
in the 1980s that may have harbored the BSE infective agent and that
some of the rendered products of these animals may have entered the feed
chain. Also named in the suit is Ridley Inc, a subsidiary of Ridley
Australia, which ranks among the largest livestock manufacturers in
North America. The company markets a broad range of complete feed
rations, nutritional supplements, feeding blocks and vitamin/mineral
premixes directly to livestock producers, and through a dealer network,
from 41 production plants in Canada and the United States. The
complainants reportedly allege that the Alberta cow that was discovered
to have BSE in May 2003, became infected with BSE soon after being fed
with Ridley\'s products.

**CANADIAN GOVERNMENT ROLLS OUT KYOTO PLANS FOR AGRICULTURE AND
FORESTRY**: Earlier this week, the Government of Canada rolled out plans
for honoring its Kyoto commitment. In its plans, the government outlined
its proposal for using the agriculture and forestry as carbon sinks,
which would count towards Canada's Kyoto target. The plans for
agriculture as outlined in the government's *A Plan for Honoring Our
Kyoto Commitment* are as follows:

> Carbon sequestration practices are predicted to generate a carbon sink
> of 10 metric tons (Mt) in the Kyoto commitment period of 2008-2012. An
> incremental sink of 16 Mt or more beyond carbon sequestration levels
> may be possible through practices such as reduced tillage, less
> summerfallow and increased use of forage, all of which could be
> financially supported through the Climate Fund. Incremental emission
> reductions from agriculture could result from activities such as beef
> feeding strategies and hog manure management

Through using the various techniques outlined in the Kyoto plan,
Canadian farmers could receive upwards of \$1 billion (CDN) over the
next seven years. Under the Kyoto plan, producers could qualify for
subsidies for zero-till or low-till farming. In addition, farmers could
also receive federal money if they use more energy efficient tractors or
convert animal waste into fuel for electrical power generation.

The plans highlighted for the forestry sector are as follows:

> Existing forestry practices would result in a carbon sink of 20 Mt.
> This estimate could fall to zero as a result of the Mountain Pine
> Beetle infestation and forest fires in British Columbia. An
> incremental sink of 4 Mt beyond carbon sequestration levels may be
> possible through practices such as afforestation, reforestation and
> avoided deforestation which could be financially supported through the
> Climate Fund.

**WILL CANADIANS GO TO THE POLLS?:** As the Gomery inquiry continues to
reveal strong evidence against the ruling Liberal Party of Canada, the
indication from Parliament Hill is that Canadians may go to the polls as
early as June. In order to bring down the government, one of the
opposition parties would have to move a motion of non-confidence against
the government with a majority of the opposition members supporting it,
or have the government defeated on a vote on the budget. What will this
mean for Canadian agriculture? The answer is most likely not too much.
Under a new government all pending bills would have to be re-introduced
once a new parliament is sitting. Bill C-264, An Act for the Recognition
and Promotion of Supply Management; Bill C-27, The Canadian Food
Inspection Agency Enforcement Act; Bill C-276, An Act to Amend the
Access to Information Act regarding crown corporations and the Canadian
Wheat Board; and Bill C-317, An Act for the Mandatory Labeling of
Genetically Modified Foods would have to be re-introduced. The
expectation on the campaign trail is that party positions put forward
regarding agriculture would be basically the same as during the last
election. As the drama continues to unfold in the House of Commons and
in the Gomery inquiry, all indications are that Canadians will be
heading to the polls in the next couple of weeks, less than year after
they elected a Liberal minority government.

**FORESTRY INDUSTRY SEES PROFITS INCREASE**: According to a survey done
by PricewaterhouseCooper (PwC), profits reported by the top 10 forest
companies in Canada leaped to \$930 million in 2004. This was a
significant jump from 2003, which saw profits of only \$242 million. The
increase was attributed to the trend towards bigger, more efficient
sawmills, which is helping to boost lumber recoveries and in turn is
making the industry more profitable. Canfor Corp. and West Fraser Timber
Co., profits were up \$421 million and \$212 million respectively. The
increase in profits for those two companies was partly attributed to
high lumber prices and investment in sawmilling technology (see CA5009,
CA5019). According to PwC, the increased profits have helped to offset
the impact on the Canadian forestry sector as a result of the softwood
duties, unfavorable exchange rates and an oversupply of newsprint.

# Find FAS on the World Wide Web: 

Visit our headquarters' home page at
[http://www.fas.usda.gov](http://www.fas.usda.gov/) for a complete
listing of FAS' worldwide agricultural reporting.

# 

# Recent Reports from FAS/Ottawa: 

+----------------+---------------------------------------+------------+
| Report Number  | Title of Report                       | Date       |
+----------------+---------------------------------------+------------+
| CA5024         | C\$1 Billion Farm-Aid Package         | 3/31/2005  |
+----------------+---------------------------------------+------------+
| CA5023         | This Week in Canadian Agriculture,    | 4/1/2005   |
|                | Issue 12                              |            |
+----------------+---------------------------------------+------------+
| CA5020         | Update on Brazilian Chicken in the    | 3/18/2005  |
|                | Canadian Market                       |            |
+----------------+---------------------------------------+------------+
| CA5019         | This Week in Canadian Agriculture,    | 3/18/2005  |
|                | Issue 11                              |            |
+----------------+---------------------------------------+------------+
| CA5018         | This Week in Canadian Agriculture,    | 3/11/2005  |
|                | Issue 10                              |            |
+----------------+---------------------------------------+------------+
| ## CA5017      | Disposal of Canada's Hopper Car Fleet | 3/14/2005  |
+----------------+---------------------------------------+------------+

VISIT OUR WEBSITE: The FAS/Ottawa website is now accessible through the
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on Embassy Ottawa offices, then Foreign Agricultural Service. The
FAS/Ottawa office can be reached via e-mail at: <agottawa@usda.gov>