Good afternoon. Thank you, Rob, and thank you, Mr. Chair.
Another issue we wanted to touch on today that is contributing to processing capacity challenges stems from an ongoing trade issue with South Korea, which is having a negative impact on American packer interest in buying Canadian cattle. South Korea requires shipments from Canada be halted if there's another case of BSE found in Canada. Because the U.S. does not have this requirement, processors in the United States that would otherwise compete for our cattle here in Canada are hesitant to do so as they must segregate those animals and then process them during dedicated shifts. This is a cost that most U.S. plants are not willing to incur.
Canadian lawmakers need to push for a resolution with South Korea to have this requirement removed. While our preference is always to have Canadian cattle processed domestically, the issue with South Korea has reduced the availability of processing space and competition for our cattle.
We also need immediate revisions to Canada's specified risk materials removal requirements, also known as SRM. It's a relic from the BSE days. Canada's requirements have created a significantly unlevel playing field between us and the Americans for our producers and processors that is no longer supported by science. The current cost discrepancy between the two countries is significant. On average, Canadian processors remove about 58 kilos of SRM on animals over 30 months of age, whereas the U.S. removes approximately 900 grams.
The Canadian Meat Council estimates that this costs our sector over $30 million a year in lost value, and there are also other associated costs on other classes of animals that we market here at home. Meat that is lost in the removal of the spinal column in animals over 30 months of age in Canada can be harvested in the United States and then sold back to consumers in Canada, which adds to the disparity and lack of fairness between the two systems on top of the cost.
While we're pleased to see that discussions with CFIA to address this disparity have begun, the goal needs to be to fully align our SRM rules with the U.S. as soon as possible. This will have immediate benefits to the Canadian sector.
Last, I want to emphasize the need for continued access to set-aside programs, similar to the ones that were implemented this year under the AgriRecovery framework, in response to COVID-19. These programs help farmers manage supply bottlenecks caused by processing disruptions. If we need this tool again, we need to make sure that it can be quickly accessed this year. When the Guelph Cargill facility closed over Christmas, for example, due to COVID-19 challenges, we were able to quickly trigger that program, which was great to see.
This type of program should become a permanent tool to help mitigate disasters and reduce processing availability. Things like floods, fires, human or animal disease outbreaks and labour force stoppages could be better managed if we had access to this tool on a more permanent basis.
That concludes our recommendations. Thank you.