The federal government has rejected a hog industry plea for a per-head payment on 2008 marketings that could have sent close to $900 million to the struggling industry.
Agriculture minister Gerry Ritz said he has told industry leaders that such a payment has been ruled out because it likely would trigger trade challenges.
“I’ve been upfront with the pork industry that there is no feasible way to deliver money on a per-head basis,” he said.
“The industry knows full well that would slam the border shut. We’ve been working exceptionally hard to get new borders open, to make new markets available to the pork sector. We’d run the risk of shutting all of those down with WTO (World Trade Organization) challenges, NAFTA (North American Free Trade Agreement) challenges and crazies like R-CALF popping up.”
Read Also
Farming Smarter receives financial boost from Alberta government for potato research
Farming Smarter near Lethbridge got a boost to its research equipment, thanks to the Alberta government’s increase in funding for research associations.
Ritz said hog industry woes will be a topic when he meets with provincial and territorial agriculture ministers in mid-July for their annual summer conference.
“We will work within existing programs,” he said. “I pledged to the pork sector we will do what we can within existing programming.”
He said he already has talked to provincial ministers from hog-heavy provinces to discuss “how do we work our way out of this.”
The government decision infuriated Liberal agriculture critic Wayne Easter.
“Absolutely that money should be paid out,” he said.”I believe it is a matter of survival for the industry. I think we’ll now see a rapid movement out of the industry within three or four weeks. Producers are tapped out on credit, tapped out on hope and losing money. Existing programs will not do it.”
Hog producers have suffered several years of losses from a combination of high input costs, a high Canadian dollar, low market prices and soft markets. Lately, U.S. country-of-origin labelling rules and consumer reaction to the H1N1 flu virus have added to industry woes.
The Canadian Pork Council said it thought basing payments on last year’s marketings could minimize the threat of trade challenges. CPC president Jurgen Preugschas said it would not affect this year’s production decisions.
Meanwhile, one of Canada’s most prominent hog industry analysts said the government’s decision comes as the hog industry seems set for losses that will stretch into 2010.
Kevin Grier from the George Morris Centre in Guelph, Ont., said he had predicted that hog market returns would improve in the second and third quarters to let most producers break even, though not come close to recouping equity lost during the past two years.
“With grain prices going up again, the dollar rising, COOL and the flu, I see a longer period of continuing losses than I previously thought,” he said.
