The feds may be keeping beef prices high — through their own regulations.According to Dr. Sylvain Charlebois, who runs an agri-food analytics lab at Dalhousie University and wrote an article on the subject, a reliable industry source claims the feds are "sustaining an outdated and opaque system that keeps beef prices unnecessarily high."They are doing so by requiring many beef suppliers to request government-administered beef import permits, even though they do not seem to be following through on handing them out."This is more than a bureaucratic issue — it directly affects affordability," stated Charlebois..To understand how this affects beef prices — readers must know how the beef import rules work."A limited volume of beef can enter the country at a low tariff, but anything beyond that is slapped with a steep import charge," stated Charlebois.When the beef supply is low, "or when specialty products are required, supplemental import permits are meant to provide flexibility and help stabilize the market."The permits are meant to provide supply without the steep import charges..However, the Beef and Veal Tariff Quota Advisory Committee, responsible for advising beef import policies, has not met since 2015. This means within a decade, importers, retailers, and independent distributors have been unable to participate in any discussion on improvements that could be made to the regulations.In that lost time, those with a vested interest — mainly those who seek to limit imports — have been benefiting. These include two beef packing and processing companies — which dominate the industry in Canada — Cargill, based in the United States, and JBS, headquartered in Brazil.."When a sector is this concentrated, and when a federal system restricts competition through import controls, the beneficiaries are obvious," pointed out Charlebois."Any policy that tightens import access—intentionally or not—further entrenches the dominance of these two multinational giants."Charlebois' source said in a case where an importer had been waiting to be allowed into the country, even though it had been legally imported and properly documented — the importer had applied for a permit and was refused. The importer was refused because " the beef had been purchased abroad at a price 'too low' compared with U.S. prices—makes little economic sense.".Apparently the product had not even come from the US, and competitive pricing has "never been grounds for rejecting a permit."Without a permit, the importer would have to wait until the next quota year — or pay a full over-quota tariff. What's worth pointing out that "the only reason paying the tariff is even possible now is because beef prices have climbed so sharply."The feds, of course, collect the tariff revenue..If the supply of beef were low, the feds would issue permits to make beef more affordable. But since they are not, Charlebois asks, "Does Ottawa actually want to keep beef prices high?""Instead, legitimate requests are rejected, supply is restricted even when the product is physically present in the country, and both processors and Ottawa benefit from elevated prices," stated Charlebois.The Canadian Meat Council will be meeting to discuss this next week..This leads to a few open-ended questions the feds have not yet answered:"Why are supplemental permits being denied on questionable grounds?" asked Charlebois. "Why has no advisory committee met in a decade?""Why do processors hold so much influence over import access?""And why is beef already in the country prevented from reaching consumers at reasonable prices?"
