Beef Export Federation teeters as merger vote ends in disarray

The Canada Beef Export Federation is on the verge of collapse after provincial cattle associations abruptly pulled out of a Feb. 17 meeting and took most of CBEF’s funding with them.

The associations withdrew their memberships in protest after a special CBEF members’ meeting to vote on amalgamating Canada’s three national beef agencies broke up in disarray without a decision.

“For all intents and purposes, our entire budget is gone,” said Gib Drury, CBEF chair.

Provincial cattle associations directly contribute 25 per cent of CBEF’s annual budget. But each dollar from provincial funders triggers three dollars from the federal government. Ottawa’s funding is conditional on producer support.

As a result, an estimated 95 per cent of CBEF’s budget comes, directly and indirectly, from Canada’s cattle industry.

With that gone, the agency cannot last more than three months without special assistance, Drury said.

He said CBEF will appeal to the federal government for direct funding outside the dollar-matching formula to keep the agency afloat.

If Ottawa says no, “(t)hen we have little option. We release all our employees and we close our offices, both in Calgary and overseas,” said Drury.

“If we don’t have any money, we don’t operate. And we’re not going to go into a bankruptcy situation where we continue to operate without money.”

Drury said CBEF has frozen money held in surplus to compensate employees if they have to be let go.

Resignations

CBEF’s failure to agree on the proposed merger during the Feb. 17 special meeting in Toronto created additional turmoil on the board of directors. The two vice-chairs, Brian Read and Rob Meijer, resigned, as did past board chair Ben Thorlakson, sources confirmed.

“I have lost faith in the leadership of CBEF,” Thorlakson, who supported the merger, said later.

The meeting was held to endorse a merger of CBEF, the Beef Information Centre and the Canadian Beef Cattle Research, Market Development and Promotion Agency into one independent marketing organization.

An industry committee called the Canada Beef Working Group (CBWG) proposed the merger in a report early last year. All three agencies had to decide whether to accept the recommendation.

The CBEF board approved the merger in principle at a regular meeting in January. But CBEF bylaws required a special members’ meeting to ratify it.

Sources said the meeting began at 8 a.m. on a pre-prepared motion to accept the merger. The merger would have required CBEF to dissolve as an organization and turn its assets over to the new group.

The CBWG made a presentation, followed by the provincial funders, followed by debate.

Unexpectedly, in mid-debate, a motion to adjourn the meeting was moved, seconded and ruled in order. A vote was taken, the meeting broke for lunch, and the result upholding the adjournment was announced immediately afterwards.

As soon as the result was known, the provincial funders submitted letters of resignation. All cattle producer groups were known to support the merger.

In a statement, CBEF said the merger motion would likely have been defeated anyway and “the meeting was adjourned to avoid a vote to simply defeat the CBWG proposal.”

But Drury, reached by phone at the Toronto airport following the meeting, accused provincial producer groups of holding a gun to CBEF’s head over the merger vote.

Drury said the associations had prepared letters of resignation ahead of time in case the merger vote failed and made no secret of the fact.

“We knew that in advance. Absolutely. That was told to us repeatedly, both at the board level and informally by CCA (the Canadian Cattlemen’s Association).”

Drury said CBEF will ask the CBWG to reconvene and try to get the merger back on the rails.

Even if CBEF survives, time is limited. Drury said CBEF and CCA have a June 2010 letter of agreement saying if the merger is not completed by Nov. 2011, the whole thing is off.

The merger issue has split CBEF down the middle, with bitterness evident on both sides.

“It was them telling us to take it or leave and the members told them to stick it. Now they walked out,” said one source.

— Ron Friesen is a reporter with the Manitoba Co-operator in Winnipeg.

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