Impacts of beef producer compensation programmes to remediate negative economic outcomes of bovine spongiform encephalopathy in Canada

Abstract

Before the first domestic case of bovine spongiform encephalopathy (BSE) was identified in May 2003, Canada was the world's third largest exporter of cattle behind the USA and Australia. After the detection of BSE, over 30 countries imposed an immediate ban on imported Canadian beef and cattle products, including the USA. The interdependence of the Canadian beef industry with that of the US market was a critical reason in Canada's market vulnerability. Reopening of the US border was prolonged and beef producers adopted various strategies to deal with the loss of income. Measures taken by individual farmers were not sufficient in supplementing their loss of income, thus creating a need for government funding and support programmes. A comparison of economic impacts and analysis of existing literature shows subsidy programmes did little to restore long-term stability or reduce market vulnerability to Canadian farm producers.