Cattle and pork producers tell MPs $100 million for set-aside is not enough

A federal committee was told the $50 million made available by Ottawa for a set-aside program in the beef industry has already been spent, according to the Canadian Cattleman’s Association.

Prime Minister Justin Trudeau announced up to $50 million in AgriRecovery funding was being earmarked to fund a COVID-19 set-aside program for cattle producers, allowing them to keep their animals longer before marketing and help mitigate temporary closures of processing plants.

After the funding announcement in early May, CCA president Bob Lowe noted that amount of money had already been spent and much more was needed to maintain a thriving industry.

Those comments were echoed by Lowe during his testimony to the standing committee on agriculture on May 8.

“If you take the number of cattle that are backed up, that $50 million was actually gone about two weeks ago. It won’t last very long,” he said.

CCA members told the committee during the online meeting that estimates showed between $35 million and $135 million is needed to continue storing and feeding excess cattle, predicting the need would be on the higher end of the estimate.

They also explained to the committee why existing business risk management programming does not work for beef producers. Much of the federal response to COVID-19 has worked within the framework of existing BRM programs.

According to the CCA, one of the primary programs the government points to for producer support, AgriStability, does not work for its members.

AgriStability largely operates based on reference margin limits, but many producers — particularly cow and calf producers — have low eligible expenses, in part because they often produce their own feed and have low labour costs.

That means their margins must drop farther than other commodities before triggering payments from the program. The CCA is proposing the federal government remove the reference price limits and payment caps for cattle producers to make AgriStability more effective.

CCA representatives also told the committee more support was needed for livestock price insurance.

While the program varies from region-to-region (and is non-existent in the Maritimes) the CCA focused on Western Canada.

Due to the pandemic, insurance costs are high and premiums are tied to markets. The cost of buying insurance is too costly for many producers, and they have only until the end of May to decide if it’s a worthwhile or affordable expense.

The CCA proposes the cost of insurance be shared by provinces, Ottawa and the industry. While some provinces have expressed support in doing so, the federal government has not yet committed to such a plan.

An additional $50 million from AgriRecovery is also is being allocated to help pork producers manage their herds, but MPs were told that amount is insufficient as well.

In a May 12 committee meeting, Rick Bergmann, chair of the Canadian Pork Council, told MPs producers have been “pushed into a crisis” and continue to seek meaningful help from government.

“Producers are not confident of their future to help with the rebuild post-COVID-19,” he said during his opening remarks.

Citing a volatile market, Bergmann reiterated previously released numbers: $30 to $50 is being lost on every pig sold this year.

“Our current crisis is a cash crisis, farmers do not have income to pay their bills, feed their animals, and keep their lights on,” he said.

“These losses are not sustainable at all, they will force farmers out of business,” he said, warning it will be mid-sized farmers and young farmers who have been struggling already from trade wars.

Janice Tranberg, president and chief executive officer of the National Cattle Feeder’s Association, told committee members her industry is now in what she considers a “worst-case scenario” and that the $50 million from the federal government “barely covered our best-case scenario.”

She told MPs that processing capacity is now at about 50 percent across the country and is not expected to be higher than 85 percent in coming months because of measures put in place to mitigate the spread of the disease.

“All of these measures will slow down production, so we don’t know precisely but at least in the short term, full capacity probably isn’t going to be able to be much past 85 percent of pre-COVID,” she said.

“It’s going to take us quite a bit of time to get back to normal, we’re not going to be able to cover the costs, certainly in the short term.”

Pork producers, like their colleagues in the cattle industry, have long suggested AgriStability is ineffective for them.

Rene Roy, vice-chair of the Pork Council, told MPs $20 per hog is needed in emergency funding to help survive the COVID-19 crisis.

“AgriStability is not a very good program in an emergency situation, it always comes into play after the fact so it’s not very good at helping producers in a crisis that we are experiencing right now,” said Roy in French.

The federal government, including Prime Minister Justin Trudeau, have committed to further funding for the industry if needed, but no specific commitments for cattle or pork producers have been made.

In a committee meeting on May 12, Agriculture Minister Marie Claude Bibeau said the federal government making $100 million available for set-asides in the cattle and pork industry showed the government recognizes the need for funding.

“If the need is greater, then we’ll expand the envelope,” she said.

During the same meeting, she also said discussions were “underway” with provinces and territories on a nation-wide livestock insurance program.

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