The federal government has accepted industry complaints that livestock aid it announced in December is not working and it introduced legislation that it promises will get money flowing in March.
Agriculture minister Gerry Ritz said if there is full participation by producers applying for advance payments and loans, as much as $3.3 billion could be available.
Opposition MPs are expected to co-operate in getting Bill C-44, amendments to the Agricultural Products Marketing Act, though the House of Commons and Senate this week.
At a news conference Feb. 25, Ritz acknowledged that previous announcements of aid programs were not doing the job for hog and cattle producers facing huge losses and nervous creditors.
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“The producers told us right away it wasn’t giving them the liquidity and that is what this is all about today,” he said.
“They were taking it in with one hand and losing it as soon as they triggered a payment under CAIS (Canadian Agricultural Income Stabilization program) and that was not giving them the cash flow they needed. We took that to heart.”
Liberal agriculture critic Wayne Easter, who was consulted and briefed by Ritz before the announcement, said in an interview opposition parties want quick approval.
“These changes correct flaws in the last announcement and will get money out to producers so it is vital,” he said.
Livestock industry leaders who have been critical of the Conservatives for announcing huge sums that were not getting to producers praised Ritz for his action.
“The measures in the package will go a long way to give producers the tools they need to manage through this terrible crisis,” Canadian Pork Council president Clare Schlegel told the news conference. “The measures announced today will provide producers with much needed breathing room.”
He said it would allow producers to restructure, scale back or leave the business in less of a panic.
Canadian Cattlemen’s Association president Hugh Lynch-Staunton offered similar praise.
“We’re very pleased with this because it does provide liquidity for individuals to make more sensible decisions than they normally could do in a forced situation,” he said. “It gives the industry time to put a lot of our things together that will help improve our future. We view this as a very important step in going where we need to go.”
He said it also offers producers a “psychological uplift. It is a very real demonstration that the government of Canada does want this industry to continue and prosper.”
The new legislation contains four key changes:
- Separate cash advances of up to $400,000 from other farm programs so the money will not be deducted from payments from other programs. The first $100,000 will be interest-free.
- Allow producers to use half their herd as security for government advances, with private sector lenders using the other half of the herd as their security. Previously, government became the secured creditor and it led private sector lenders to back away.
- Introduce a “severe economic hardship” test that will allow the government to offer emergency advances.
- Extend repayment terms from six months to 12 months.
Ritz said he convinced prime minister Stephen Harper to allow him to announce the livestock sector initiative the day before the Feb. 26 budget so it would be approved quickly and not get caught up in prolonged and possibly government-ending budget votes.
