Decision Making Framework for Livestock Border Closures

Executive Summary

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), with cooperation and input from livestock industry representatives and members of other government organizations, has developed a Decision Making Framework for Livestock Border Closures. The Framework is to be implemented in the event that the border between Canada and the U.S. or another significant trading partner is closed to the export of livestock and livestock products from Ontario. The Framework is designed to help maintain infrastructure and contribute to the sustainability of the pork and beef production and processing sectors during any disruption to border traffic.

Information gathered in the first phase of the project revealed that few jurisdictions have devoted extensive effort to developing a plan to mitigate the impacts of potential border closures on the livestock production, marketing and processing sectors. Events in the recent past have shown the enormous impact of border closures on the viability of the livestock industry in Ontario. The closure of the U.S. border to Canadian cattle and beef in response to the discovery of BSE in Alberta cost the Ontario economy an estimated $945 million. This has led to a real recognition in the province of the vulnerability of the livestock sector to border closure threats such as a foreign animal disease outbreak.

The beef and pork industries in Ontario are heavily dependent on exports of live animals and meat products. Therefore, border closures to the U.S. or other export markets would severely impact these sectors and associated industries in Ontario. The decision was made for OMAFRA to go ahead and lead the development of a plan that could be used in the event of a border closure. While the main focus was on the beef and pork sectors, there was recognition that a border closure would also impact other livestock commodities.

Although border closures are often national in scope, beginning with the development of a national plan would be complex and the time frames to achieve a final national plan would not provide the Ontario livestock industry with a strategy that could be implemented quickly. The concepts and recommendations in this Framework, while they are specific to Ontario, could be applied by other provinces or at the national level.

There are a number of uncertainties around border closures. In this document the term "border closure" refers to anything that prevents the export of Ontario livestock or livestock products to other countries. The closure may be put in place by a single country or multiple countries. A country may close the border to goods from other countries for any number of reasons including a foreign animal disease (FAD), food safety risk, weather disaster, terrorism etc. The duration of a border closure may be unpredictable, resulting in market disruption, confusion and planning difficulties for industry and government. While the length of the closure is expected to be unpredictable, the options and strategies for dealing with the impacts must be such that they can help mitigate impacts as time goes on.

The sectors affected by a border closure can also vary. It could affect the swine and/or beef sector and, within each sector, the restrictions could be on live animals and/or meat products. In order to develop options to assist the production and processing industries, the worst case scenario was used as the expected situation. Not all options will work for every border closure scenario. Information is provided on potential options to allow for informed decision making when determining the best course of action to deal with the actual circumstances of the border closure. The appropriate option(s) to implement cannot be determined until the factors surrounding the border closure are known and can be looked upon in the context of the livestock sector(s) involved.

The Framework identifies the provincial and ministry emergency management structure that will be activated upon notification of a border closure, identifies the positions, roles and responsibilities of Ministry Action Support Teams and provides operational details for managing each of the identified components in the Framework. Potential options that can be implemented during a border closure are identified for each key component. The decision to implement them will depend on the circumstances of the border closure.

Communication throughout the value chain will be critical during a border closure. Industry participants need to know what is happening, what caused it and what actions are being taken by governments, industry leaders and producer organizations. Consumers will need to be reassured that their food supply is safe. With the loss of export markets, the affected sectors will be totally reliant on domestic consumption and cannot afford to have unwarranted concerns regarding food safety impact the smaller domestic market. The communications plan is implemented upon notification of the border closure. Initial actions focus on informing industry stakeholders, identifying a key spokesperson(s) and implementing communication vehicles (i.e. conference calls, website, media bulletins, etc.). A key part of communications will be developing key messages with stakeholders and managing public concerns regarding food safety and animal welfare.

Maintaining an appropriate level of biosecurity is an ongoing priority since a disease outbreak at the producer or sector level would only exacerbate the impacts of the border closure. The communication of recommended biosecurity measures is the only response action to be considered upon suspicion or confirmation of a foreign animal disease. Effective biosecurity measures will be important in the control and/or eradication of a disease, and subsequent resumption of exports.

Managing surplus animals will become a priority when the export markets for animals or product is suddenly shut off. The animal production chain cannot be turned off quickly. There will be a rapid development of surplus inventories in the production system that will need to be addressed on farm by individual producers. For cattle, modifying feeding programs and management on farm will help delay the volume going to market, but the pork sector has few options to reduce the volume of either weaner pigs or market hogs. Options provided (e.g. extend housing and feeding, delay marketing, etc.) for the swine sector will gain a bit of time to allow producers and the industry to react to the situation.

There are no production or marketing controls in the beef or swine sectors like those that exist in poultry and dairy. With individual producers making independent marketing decisions, the opportunity for orderly marketing in these sectors is limited. In addition, the commodity organizations do not have authorities to control marketing and neither does the government except in a declared emergency. The options available are limited and focus on facilitating discussions with industry stakeholders to manage issues and identify options to deal with the border closure situation.

The packing sector will feel the impacts of a border closure to meat products immediately. The loss of markets for their beef and/or pork products, will result in a reduction in processing or closure of packing plants until alternate markets are found. This in turn will reduce the demand and market price for live animals. Packers that have domestic markets or alternate export markets will continue operating by adjusting throughput. Maintaining slaughter capacity is important in managing surplus animals and supporting the market.

While there are a number of storage methods for beef and pork, storage space will become a limitation very quickly. As time goes on there may be the need to dispose of surplus animals and meat products. The methods available to euthanize and dispose of animals will be communicated to producers. OMAFRA will facilitate industry discussions to assess and select appropriate options for mass euthanasia (on-farm and off-farm options have been identified). Communication strategies will be essential in managing public reaction and maintaining consumer support for the industry.

Business risk management (BRM) programs are designed to support the production sector during periods of income fluctuation. During the BSE crisis industry was critical of BRM programming for being slow to respond and identified several design issues that prevented funds from flowing to those with significant needs. In an effort to respond, the federal and provincial government provided various levels of ad hoc financial assistance to producers and processors during the BSE crisis. The latest suite of BRM programs (i.e. AgriInvest, AgriStability, AgriRecovery) were developed to be more responsive to producer needs. AgriInvest is a savings account accessible to producers during periods of low income; AgriStability, similar to the Canadian Agricultural Income Stabilization Program (CAIS), provides support to producers for larger declines in farm income; and AgriRecovery, designed to provide a rapid response to small and medium-sized, local disaster situations and to fill gaps not covered by existing government programming. Most livestock border closure situations would likely be beyond the scope of the AgriRecovery Program, due to the size and extent of the impact.

The options provided in the Framework to manage surplus animals, maintain orderly marketing, etc., are designed to achieve specific objectives, which in the short and long term, act to encourage a stronger market for livestock and keep products flowing. The options would be purely voluntary on behalf of the sectors as there are no legislative authorities in existence to make these actions mandatory. Providing financial incentives can encourage producers to implement the identified options.

Programs designed to encourage implementation of the options are identified in the Framework. Whether any of the programs identified are implemented would depend on the circumstances (reason, extent, duration, timing) of the border closure and the ability of the other BRM programs (AgriInvest, AgriStability) to alleviate the financial impact of market fluctuations.

While potential programs are identified and described in the Framework, it should be recognized that there is no commitment by the government to implement or provide funding assistance. Any requests for assistance by the production or processing industries would need to be assessed on a case by case basis at the time.

Financial difficulty and uncertainty can produce high levels of stress for producers and their families. The Framework identifies available resources that are to be communicated to producers and their families to help manage emotional and financial stress as they deal with the impact of a border closure.

The Decision Making Framework for Livestock Border Closures has been developed using current information on the industries involved. It is impossible to predict what situation will exist if there is a border closure in the future. Regular reviews of the Framework based on the current structure of the sectors will identify necessary changes which will be communicated to the parties involved in order to ensure that this Framework will provide timely guidance if and when a border closure occurs.

Industry participation in identifying the appropriate options based on the circumstances of the border closure is essential to achieving the goal of helping to maintain the infrastructure and contribute to the sustainability of the beef and pork production and processing sectors.

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