Mark Elford, Chair Canadian Cattle Identification Agency

June 2016

TRACEABILITY UPDATE: Saskatchewan Stock Growers Association

Annual General Meeting 2016

LIVESTOCK TRACEABILITY

1. Canadian Agri-Traceability Services

2. Technical Advisory Committee

New research and technology

Data integrity and the tag web store

3. Proposed Livestock Traceability Regulatory Framework

CANADIAN AGRI-TRACEABILITY SERVICES (CATS): UPDATE

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CATS has not maintained the capacity to complete the project

to establish a national traceability database according to its work plan, and it is under dissolution.

CANADIAN AGRI-TRACEABILITY SERVICES (CATS): UPDATE

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CCIA’s Board of Directors is position CCIA to:

1. Develop the CLTS database to meet upcoming regulatory amendment requirements

2. Continue to expand its services as national administrator – i.e., Provide livestock traceability database services as the National Administrator for beef and dairy cattle, bison and sheep – as well as other species such as goats, cervid, equine, etc.

The TECHNICAL ADVISORY COMMITTEE (TAC)

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Key Role:

To provide a forum for discussion of technology and information management, and to make recommendations to CCIA’s Board of Directors regarding changes or improvements affecting the CLTS database and livestock traceability in Canada

The TECHNICAL ADVISORY COMMITTEE cont’d

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Last year,

CCIA’s TAC created and now leads a Research and Development (R&D) Cluster to develop practical solutions to challenges facing industry and governments with the implementation of a fully-functional livestock traceability system in Canada.

TAC: NEW TAG TECHNOLOGY

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Development of… new tags that are different than tags currently approved for the beef sector

• High-retention design

• Highly-visible design

• Field trials underway

• Should be approved for use within one year

NOTE: A confidentiality agreement prevents the sharing of further details.

TAC: NEW TAG TECHNOLOGY cont’d

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Development of… A TERMINAL TAG

Original concept developed for deadstock – now intended for the transport of animals destined to a terminal site

• Highly-visible, low-cost design, similar to a luggage tag

• Proof of concept trial underway to determine if the tag works on animals (it works well on suitcases in the airport)

• Should be approved for use within one year

NOTE: A confidentiality agreement prevents the sharing of further details.

TAC: NEW TAG TECHNOLOGY cont’d

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Supply of… MATCHED TAG SETS

Which prints the same unique identification number on the approved radio frequency identification beef cattle tag

and the matching visual tag in a set

• Y-Tex matched sets already available

• Allflex matched sets now available

… within CCIA’s tag web store at tags.canadaid.ca

TAG DISTRIBUTION: UPDATE

Canadian Cattle Identification Agency is now providing distribution and logistics services for beef cattle tags across Canada through all authorized tag dealers as well as directly through a QUICK AND EASY-TO-USE web store at

tags.canadaid.ca and toll-free telephone at 1-877-909-2333.

TAG WEB STORE ADVANTAGES: FOR BEEF PRODUCERS

QUICK and EASY-to-USE

It takes 5 minutes to activate a web store account, select and order tags from the full array of approved tags and applicators, and receive the supplies within 3-5 business days.

Starting price point is under $3 per tag

Web Store: tags.canadaid.ca Toll-free Order Desk: 1-877-909-2333

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TAG WEB STORE ADVANTAGES: SPECIAL PROMOTION

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We offer COMPLIMENTARY livestock traceability

support and tag web store services.

CONTACT US today:

Toll-free telephone: 1-877-909-2333

& Email:

orderdesk@canadaid.ca

TAG DISTRIBUTION: REINVESTED REVENUES

• The tag distribution and tag dealer networks;

• The tag distribution system, supply chain process and inventory reviews;

• Technical research and development;

• The CLTS database infrastructure; and

• The labour to manage the database and support the livestock industry to meet provincial, territorial and federal regulatory requirements.

The CATTLE IMPLEMENTATION PLAN (CIP)

Industry’s roadmap to identify the targets, steps and issues in implementing a sustainable, effective and efficient cattle traceability system for Canada.

ALL SECTORS of industry and governments developed the CIP through a collaborative process at the National Cattle Traceability Summit in August 2011.

HOW TO ACCESS the CIP: The approved version of the CIP is online within CCIA’s home page at www.canadaid.ca and www.canadaid.ca/fr/, in English and French respectively.

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The CIP COMMITTEE: INDUSTRY & GOVERNMENTS

CCIA leads the CIP Committee, which is comprised of industry and governments working together to identify the targets, steps and issues in implementing traceability within the cattle industry.

• Livestock Markets Association of Canada • Canadian Cattlemen’s Association

• Canadian Livestock Dealer’s Association • Saskatchewan Cattlemen’s Association

• Alberta Beef Producers • Manitoba Beef Producers

• Canadian Agri-Traceability Services • Canadian Veal Association

• Canadian Veterinary Medical Association • Alberta Cattle Feeders Association

• National Cattle Feeders Association • Alberta Agriculture & Rural Development

• Saskatchewan Stock Growers Association • Canadian Cattle Identification Agency

• Beef Farmers of Ontario • Dairy Farmers of Canada

• Canadian Food Inspection Agency • Ontario Ministry of Agriculture, Food and Rural Affairs

• Livestock Identification Services • Livestock Services of Saskatchewan

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19 Industry Associations Support the CIP Alberta Auction Markets Association Dairy Farmers of Canada

Alberta Livestock Dealers & Order Buyers Association Fédération des producteurs de bovins du Québec

Alberta Beef Producers Livestock Markets Association of Canada

British Columbia Cattlemen’s Association Manitoba Livestock Markets Association

Canadian Beef Breeds Council Manitoba Beef Producers

Canadian Cattle Identification Agency Maritime Beef Council

Canadian Cattlemen’s Association National Cattle Feeders Association

Canadian Livestock Dealers Association Beef Farmers of Ontario

Canadian Meat Council Saskatchewan Cattlemen’s Association

Canadian Trucking Alliance

INDUSTRY’S COMMITMENT: BY RESOLUTION

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INDUSTRY’S COMMITMENT: DID YOU KNOW?

As of January 31/16, the Canadian beef industry

has supported the livestock traceability system through the purchase of

96,690,187

approved tags since program inception.

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INDUSTRY’S COMMITMENT: DID YOU KNOW?

To develop the Cattle Implementation Plan, industry has held:

• ~75 meetings since August 2008 (34 CIP and 41 subcommittees) 11 in-person meetings (7-8 hours per meeting) 64 conference calls (1-3 hours per call)

• ~170 hours of meetings on record (excluding small working groups that collaborated outside of organized committee conference calls, administration time for meeting planning, CIP document development and information processing) Average attendance – 14 people per in-person meeting

or conference call CIP and its subcommittees range from 5-35 members

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2016:

On Feb.19th, a five-person delegation went to Canadian Food Inspection Agency (CFIA) headquarters in Ottawa to meet with representatives of CFIA and Agriculture and Agri-Food Canada (AAFC). PURPOSE: To address industry concerns that proposed regulatory changes were not using the CIP as the road map to traceability.

The CIP COMMITTEE: ACTIVITY

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2016 cont’d:

On May 5th, CFIA held a meeting in Calgary with select industry representatives from the CIP Committee to discuss the technical aspects of the draft regulations.

PURPOSE:

To engage in a Livestock Traceability Regulatory Amendment Dialogue, which was a facilitated, face-to-face meeting to discuss outstanding issues and concerns – i.e., to ensure shared understanding, clarity and mutually positive outcomes

The CIP COMMITTEE: ACTIVITY cont’d

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CFIA LIVESTOCK REGULATORY AMENDMENT: PROPOSED APPROACH

PROPOSED Farms, Feedlots,

Fairs, Exhibits Auctions,

Assembly yards Terminal

Sites

Phase I when regulations come into force

Reporting INDIVIDUAL

receipt of animals via

PASSIVE READING

Reporting receipt of animals

as a GROUP

Reporting individual

receipt of animals – all tags

Phase II two years after

regulations come into force

Reporting INDIVIDUAL

receipt of animals via

PASSIVE READING

Reporting INDIVIDUAL

receipt of animals via

PASSIVE READING

Reporting individual

receipt of animals – all tags

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SCANNING OF LIVESTOCK

Government Proposal: All cattle at intermediate sites be scanned on an individual basis on a passive reading program, starting two years after the new regulations come into force CIP: Does not support the scanning of livestock on an individual basis at auction marts and buying stations due to…

The CIP COMMITTEE: OUTSTANDING ISSUES

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SCANNING OF LIVESTOCK cont’d

The EXTRA STRESS & SHRINK on cattle will cost producers significant financial hardship, considering :

• In the fall, the average calf weighs 550lbs.

• One per cent additional shrink results in a loss of 5.5lbs per animal.

• Average price of $2.25/lb results in a loss of -$12.37/animal

• -$12.37 x 2,500 animals/sale results in a loss of -$30,925/sale

• This means cattle sold at auctions would result in >$66M in devaluation of cattle in 2015 alone.

The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

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SCANNING OF LIVESTOCK cont’d

MARKET NEUTRALITY:

All intermediate sites must be treated equally when it comes to regulations, reporting and enforcement –

auction markets, buying stations, veterinary clinics, water sheds, A.I. units, fairs, exhibitions, electronic sales (e.g., direct sales to order buyers, packers, feedlots, and farm-to-farm)

and Internet sales must all be considered the same.

The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

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SCANNING OF LIVESTOCK cont’d

MARKET NEUTRALITY:

Feedlots scan and report at processing within seven days, but after price determination – which gives direct and electronic sales an advantage.

The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

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SCANNING OF LIVESTOCK cont’d

Market Neutrality & ENFORCEMENT:

It is a well-known fact that CFIA inspections are more prevalent at auction markets, with less visits to buying stations and feedlots.

If auction markets are forced to scan and report, and enforcement is not equal at other intermediate sites,

market neutrality is in jeopardy.

The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

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SCANNING OF LIVESTOCK cont’d

Market Neutrality & EROSION of PRICE DISCOVERY:

• If auction markets are forced to scan, some may close.

• If producers seek other methods of selling than auction markets, then more auction markets will close, and any remaining business could be devalued.

• Producers still look to the auction markets for TRUE PRICE DISCOVERY – especially for feeder cattle and cull cows. Any reduction in auction markets would be a major blow to the entire Canadian livestock industry.

The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

MOVEMENT REPORTING Government Proposal: Report all incoming movements of cattle to the administrator

CIP: Recommends movement documents be used with a minimum of data –

• SENDERS: Sender’s PID, species, # of animals, date loaded, licence plate/ID of conveyance

• RECEIVERS: Sender’s PID, receiver’s PID, date of unloading, licence plate/ID of conveyance, # of animals, approved tag ID numbers)

NOTE: Recommends OWNER be held LIABLE for any non-compliance AMPs for incorrect or missing information.

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

MOVEMENT REPORTING cont’d

Government Proposal: Report all incoming movements of cattle to the National Administrator

CIP: Does not support movement reporting between LINKED PREMISES as per the CIP’s definition for a linked premises, which describes these sites as:

“Locations considered to be ANIMAL HEALTH UNITS because of the REGULAR MOVEMENT

of animals or products between them”

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The CIP COMMITTEE: OUTSTANDING ISSUES – Types of Premises

1. PRIMARY – the primary location of the agricultural operation and its continuous land base

2. LINKED – locations considered to be animal health units because of the regular movement of animals/products between them

3. CO-MINGLING – a location where animals from more than one herd of origin are blended (e.g., auction marts; feedlots; assembly yards; buying stations; electronic sales; rest, feed or water sites; etc.)

4. LINKED CO-MINGLING – a location where animals of more than one herd of origin are grazed concurrently (i.e., public or private community pastures, federal and crown grazing land)

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

TAGGING SITES

Government Proposal: 1. Tagging sites remain in the regulations; and 2. Tagging sites apply anonymous,

coloured replacement tags to untagged animals CIP: Agrees that intermediate sites should be allowed to provide tagging services and report tag replacement events without requiring tag dealer status

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The CIP COMMITEE: OUTSTANDING ISSUES cont’d

TAGGING SITES cont’d

CIP: • Recommends the OWNER of the cattle be held

LIABLE for non-compliance AMPs for shipping untagged animals. Intermediate sites, truckers and buyers should be exempt from AMPs for receiving, transporting or purchasing untagged cattle.

• Does not support the use of anonymous, coloured replacement tags at intermediate sites (i.e., due to tag retention issues, which can lead to cattle devaluation and revenue loss).

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The CIP COMMITEE: OUTSTANDING ISSUES cont’d

TAG TOLERANCE Government Proposal: A tag-loss tolerance cannot be included in the regulations; though, it could fall under policy.

CIP: • Recommends a tag-loss tolerance of 10 per cent per delivery

in the regulations based on the preliminary results of CCIA’s Tag Retention Project and Alberta Agriculture and Forestry data

NOTE: There was a discretionary five per cent tolerance limit, which CFIA revoked after 10 years despite industry’s recommendations.

• Does not support the suggestion to include tag-loss tolerance in policy considering that policy changes are made more easily than amending regulations

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The CIP: CFIA CONSULTATION – Cost-Benefit Study

Since regulatory initiatives should deal with minimizing the regulatory burden on small and medium enterprises,

CFIA’s TREASURY BOARD REQUIRES –

A. COMPLIANCE costs: One-time (upfront) and ongoing costs that businesses face when complying with a regulation, and

B. ADMINISTRATIVE costs: Time and resources spent by businesses to demonstrate compliance with government regulatory requirements in terms of: (a) planning, collecting, processing and reporting of information; and (b) completing forms and retaining data required by governments

to be calculated for each regulatory initiative.

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The CIP: CFIA CONSULTATION – Cost-Benefit Study

The CIP COMMITTEE’S ACTION…

Established a Costing Subcommittee to perform a thorough cost analysis on each component of the Cattle Implementation Plan, specifically animal movement at auctions, feedlots and other co-mingling sites.

This subcommittee was tasked with identifying the business issues, strengths and weaknesses related to technological implementation of the CIP.

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CONCLUSION:

1. The research team DID NOT complete enough survey interviews with industry to DETERMINE THE REAL COSTS for industry to meet the traceability requirements and recommendations per the CIP.

2. BUSINESS PROCESS IS UNIQUE TO EACH OPERATION – i.e., auction mart and/or buying station.

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The CIP: CFIA CONSULTATION – Cost-Benefit Study

CIP COST-BENEFIT ANALYSIS SUBCOMMITTEE RECOMMENDATIONS: 1. CFIA must invest more resources into this activity

by completing another study.

2. The CIP Committee will discuss these issues in more detail, in-person with CFIA throughout 2016.

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The CIP: CFIA CONSULTATION – Cost-Benefit Study Recommendations

COST-BENEFIT: WHO PAYS?

Government Proposal: In the past, government has indicated that industry will be responsible for the cost of movement reporting. NOTE: A more comprehensive cost-benefit analysis will be completed.

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

COST-BENEFIT: WHO PAYS? cont’d

CIP: • Industry should not be expected to pay more

for traceability.

• Livestock operators have purchased >96M tags at an average cost of $3/tag.

• Intermediate sites should be compensated for traceability costs that are over and above normal business process.

• Movement reporting should be built on existing infrastructure – e.g., brand inspection.

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

SPECIES HARMONIZATION At recent CIP, Canadian Cattlemen Association (CCA) and Industry Government Advisory Committee meetings, industry has suggested: Cattle be excluded from currently proposed regulatory changes, and that separate regulations be developed for the cattle sector

EXAMPLE: Pork sector

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The CIP COMMITTEE: OUTSTANDING ISSUES cont’d

REFERENCE BY INCORPORATION Industry has been considering the possibility of:

Introducing and implementing proposed regulations using a Reference by Incorporation (RBI) document CIP: Does not support speculative regulations. Industry has been clear: Industry agrees to what is achievable now, not what may/not be achievable in the future.

NOTE: RBI is not a permanent solution. Typically, RBI terms are phased-out 18 months following the implementation of new regulations.

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The CIP: OUTSTANDING ISSUES cont’d

REFERENCE BY INCORPORATION cont’d

• Industry is not prepared to support regulatory changes that speculate on future possibilities.

• Today’s technology is the same technology that was used in the Auction Market Research Study.

• A phased-in approach does not guarantee that more effective and affordable technology will be available in two years.

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The CIP: OUTSTANDING ISSUES cont’d

• Complete second cost-benefit analysis of proposed regulatory options

• Complete phase-two consultations

• Complete review and consideration of phase-two comments when drafting the next draft of the proposed regulations

• Provide stakeholders with comment period for the next draft of the proposed regulations

• Publish finalized regulations in Part II of Canada Gazette

• Proposed regulations COME INTO FORCE

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The CIP: CFIA’s NEXT STEPS

• Publish in Canada Gazette in Spring 2017

• Suggested 75-day comment period to follow

• Publish in Part II of Canada Gazette in Summer or Fall 2017

• New regulations come into force in 2018

• One-year adjustment/transition period before hard enforcement

• Proposed passive scanning at auctions and buying stations in 2020

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The CIP: PROJECTED TIMELINES

• Industry is united, ready and willing to move forward on movement reporting using the CIP as the roadmap for implementation, with adjusted target dates and timelines.

• In preparation for the new regulations coming

into force, the cattle industry will continue with the development of an animal movement reporting tool based on the CIP’s principles.

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The CIP: NEXT STEPS

Questions & Discussion

For more information, please contact:

Mark Elford, Chair Canadian Cattle Identification Agency c/o Canadian Cattle Identification Agency info@canadaid.ca Toll-free: 1-877-909-2333

© 2016 Canadian Cattle Identification Agency All material in this presentation is the property of Canadian Cattle Identification Agency