Governments tout existing programs for hog farmer aid

Loan loss reserve plan to allow extended interest-free periods

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Expecting improved hog markets this spring, Canada’s federal and provincial governments have asked hog farmers to fall back on existing risk management programs rather than expect ad-hoc aid.

In nine variations of the same release Wednesday, federal Agriculture Minister Gerry Ritz and most provincial agriculture ministers urged producers to take advantage of existing programs.

The ministers cited the observations of the Hog Industry Task Team, led by the Canadian Pork Council, Canadian Meat Council, pork processors and producers, which was formed to consider “possible solutions” to hog sector challenges, “including working to ensure the sector makes full use of existing programs.”

“There is broad consensus among industry and market analysts, both in Canada and abroad, that market conditions for hog producers will improve by the spring of 2013,” the governments said.

On a list of “immediate actions” to help the sector through “short-term financial pressures,” the federal government noted it will amend the terms of the Hog Industry Loan Loss Reserve Program (HILLRP) so lenders are allowed to extend an interest-only payment period, for hog producers who already have loans under the program.

Beyond that, the governments said they will:

  • work to “better inform the sector so they can take full advantage of immediate support” from existing business risk management programs, such as AgriStability interim payments, the funds already held in AgriInvest accounts, and cash advances through the Advance Payments Program (APP).
  • work with AgriInvest program administrators to “fast-track” hog farmers’ requests for withdrawals from that program’s accounts, now holding a total of over $31 million in farmer and government funds, and hog farmers’ requests for AgriStability interim payments.
  • work with APP administrators to see that applications for cash advances are processed as quickly as possible, noting almost $36 million in cash advances have been issued to hog producers across Canada since April.
  • work with “producers and their associations, financial institutions and program administrators to facilitate producer access to financing and cash advances.”

High feed costs coupled with low hog prices have resulted in increased pressure for hog producers in recent months, the governments said.

“Pork producers are also dealing with the accumulated impacts of the higher Canadian dollar and U.S. country-of-origin labelling (COOL) legislation,” Canadian Pork Council president Jean-Guy Vincent said in the governments’ release.

The council, he said, “will continue to advance ideas through the task force on what additional actions may be required until stronger market conditions return.”

The Hog Industry Task Team said it will continue to explore ways to boost “sector competitiveness” in the mid- to long term.

“All agree that measures must respect international agreements, treat all commodities and regions fairly and must not mask market signals,” the governments said.

The federal and Quebec governments also pledged in their joint release to examine ways to help that province’s hog producers protect themselves from price fluctuations using “private mechanisms,” noting the Market Risk Management Service available through the Federation des producteurs de porcs du Quebec.

Related stories:
Olymel offers $65M for hog producer Big Sky, Oct. 18, 2012
FCC’s hog farmer clients offered deferrals, adjustments, Oct. 4, 2012
Hog producer Puratone enters creditor protection, Sept. 13, 2012

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