Regulatory wolf in sheep’s clothing

From Karen Selick, reprinted from the August 11 National Post:

Canada’s pending entry into the Trans Pacific Partnership has focused public attention – and well-deserved wrath – on the subsidies consumers are forced to pay to dairy and poultry farmers through the supply management system. However, I recently stumbled across a hidden agricultural subsidy most Canadians have probably never heard of, but are forced to pay for through their taxes.

My client Montana Jones came to the attention of National Post readers when her photo appeared on the front page of this newspaper in April under the headline “Have you seen this sheep?”

Ms. Jones is a breeder of a rare heritage breed of sheep called Shropshires. Thirty-one of her sheep were stolen by a group purportedly wishing to protect them, after the Canadian Food Inspection Agency (CFIA) ordered that they be destroyed and tested for a disease called “scrapie.”

Scrapie has been known to exist for at least 280 years. There is no evidence it can harm the health of human beings. It merely affects the productivity of sheep, causing them to lose wool and die younger than they otherwise would have. A scrapie infection constitutes a financial setback for the sheep’s owner, but so do various other illnesses, accidents or predator attacks.

Shepherds normally cull sheep from their flocks before the end of their natural lifespan anyhow. (Nobody can afford to feed unproductive elderly sheep.) In large commercial lamb-producing operations, ewes are frequently destroyed at four to eight years of age. Since scrapie can have a symptomfree incubation period of three to eight years, it’s not known how many productive sheep years – if any – are lost in a typical scrapie case.

Nevertheless, the moment the CFIA suspects that even a single sheep on a farm might have scrapie, it orders the destruction of all sheep on the farm that are considered genetically susceptible. It then pays compensation to the owners out of the Consolidated Revenue Fund (i.e. general tax revenues) for both the sick and healthy animals it destroys.

In other words, the federal government operates a livestock health insurance scheme, for which farmers pay no premiums and taxpayers pay all benefits.

In Ms. Jones’ case, only one of the 50 sheep that died and were tested showed positive for scrapie. That allegedly scrapie-positive ewe (we’re still negotiating with the CFIA to confirm the tissue sample identity through DNA testing) was still productive. In fact, it was pregnant with twins when it died. An expert I spoke to at the UK counterpart of the CFIA told me that infection rates of only 1% or 2% of a flock were typical.

So the Canadian government operates a scheme in which we kill 98 or 99 healthy animals just to find one or two sick animals, which at worst might have been somewhat less productive for the last few years of their lives. Then taxpayers pay compensation for 100 dead animals.

One can’t help but suspect that in addition to underwriting the health of animals, the scrapie-eradication program was also designed to ensure a livelihood for some of the CFIA’s 7,500 employees.

I canvassed several sheep farmers to see whether any of them had ever considered purchasing private insurance for their sheep, to insure against losses from scrapie. Of course not. Why would they? The government insures them, and most were quick to point out that scrapie is not a significant worry for them – overwhelmingly, their losses come from coyotes. But were you aware, dear taxpayer, that you compensate farmers for this, too? In 2010, for instance, Ontario paid more than $1.4million to farmers for livestock losses from predators. But I digress; that’s a provincial program, not connected with the CFIA.

My question is: Why isn’t a shepherd’s inventory shrinkage from scrapie the sole problem of the shepherd, just as any other business’ accidental inventory shrinkage is borne by the business? Why should taxpayers, many of whom don’t eat lamb, pay the cost of ensuring higher productivity for sheep farmers? Why should the price of lamb not accurately reflect the cost of producing it, including the cost of animal illness, instead of being partially camouflaged within the government’s general expenditures?

The CFIA justifies its program as a requirement to meet international standards, and indeed the website of the World Organization for Animal Health confirms that other countries seem to have implemented similar regimens. However, Canada’s current scrapie-eradication program was initiated only as recently as 2005. Somehow the country survived without it for 138 years.

What is really virulently contagious, it seems, is regulation and bureaucracy. With countries around the world going broke, it is hidden subsidies and programs like this that should be eradicated.

Karen Selick is the litigation director for the Canadian Constitution Foundation.

6 Comments

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6 responses to “Regulatory wolf in sheep’s clothing

  1. You might find this interesting and related:
    Exposing the Lies Prions, Organophosphates & Mad Cow Disease
    http://www.acresusa.com/toolbox/reprints/Purdey%20Interview_Dec01.pdf

  2. Beverley Viljakainen

    Thank you for this very enlightening posting, Karen. It answers a lot of questions that are floating about and focuses on the largely invisible bureaucracies behind so much of what just doesn’t make sense!

  3. bill wood

    Karen you did not do your homework. The compensation for scrapies started back in the 1970’s

    • Bill, you did not do your homework. The compensation for scrapie may well have started back in the 1970s but the CFIA itself says that its “current scrapie eradication program” started in 2005. They’ve put it in writing.

      • John

        Karen. I’m not sure why you began with the comment about supply management, but it got my attention. I have often argued that supply management converts dairying into a profession. Society appears to accept supply management for doctors, dentists, lawyers, veterinarians, teachers, professional sports teams (together with the generous prices charged for their various goods and services). ‘Subsidies’ to these groups consume considerably more of one’s annual income than those for milk, chicken, eggs and turkey, but do not meet the same level of scrutiny. Also, one of the advantages of supply management is it’s bureacratic efficiency. As of today, dairy farmers in Canada know their financial future with some certainty (without input from Government). Meanwhile. Imagine the bureacratic wheels currently spinning in futility as the rest of the world’s bureacracies try to find ways to help their dairy farmers through yet another slump in milk prices.
        Supply management isn’t perfect, but it does have some real advantages. One of the major criticisms is the increase in product-prices, but I’d argue these are small in relation to the overall level of taxation we are forced to endure (and can easily be reconciled via adjustments to taxes/benefits for lower-income individuals).
        One positive note is that Governments have finally discovered that they need to manage their debts. This has to lead to a reduction in program spending for ‘non-core’ functions. CFIA will be forced to choose more carefully in the future and scrapie eradication might have to be scaled back or even abandoned.

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