For more than a decade, Canadian hog industry leaders have viewed as toxic any suggestion of direct government payments to producers, fearing it could trigger trade-damaging countervail challenges.
Last week, Canadian Pork Council president Jurgen Preugschas from Mayerthorpe, Alta., told MPs an “unprecedented” crisis is forcing him to reconsider the refusal to recommend government aid outside existing whole-farm safety net programs.
He said a lack of federal programs has led several provinces to announce direct payment aid for livestock.
“I don’t have the answer or know what the answer should be,” Preugschas told MPs on the House of Commons agriculture committee March 5.
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“Maybe we do have to start looking at some more ad hoc types of programs so that we do have an industry in the future. I really believe we are putting a lot of our producers at risk. We need to look at it. Let’s be creative.”
Sitting beside him at the table as the committee continued hearings on the livestock sector was Saskatchewan Association of Rural Municipalities board member Ray Orb, a Regina area farmer.
He lobbied for direct payments and suggested Ottawa could begin by paying Saskatchewan cattle producers approximately $100 million as the federal 60 percent to match what he said was Saskatchewan’s 40 percent per-head payment totalling $70 million.
“We encourage the federal government to consider providing financial assistance to the industry in the short term to maintain a base cow and hog supply to supply domestic and international markets,” said Orb.
“Short-term assistance has to be implemented to ensure that the livestock industry can survive long enough to allow long-term programs to be developed.”
He said to justify direct payments to Saskatchewan cattle producers, resisted by the federal government as having potential to spark retaliatory duties from importing nations, Ottawa could be creative and call it money to offset extra expenses faced by producers because of Canada’s more stringent rules on removing specified risk materials during slaughter. SRMs refer to parts believed most at risk for transferring BSE.
The call for a return to aid outside existing business risk management programs drew support from opposition MPs but not Conservatives.
Liberal Wayne Easter said 60 percent of the hog industry on Prince Edward Island is out of the business now and one of the largest hog producers in Nova Scotia is in the process of going out of business.
“Our industry’s going down the hole. We’re losing our industry,” he said.
“The federal government should be there with money.”
Preugschas said it isn’t only the Maritimes that is seeing industry contraction and loss. During the past two years, 28 percent fewer farms across the country report hog production, he said, citing Statistics Canada numbers. Hog inventories are down 18 percent over those two years.
“These are really significant decreases,” he said.
Meanwhile, Canada imports approximately 200,000 tonnes of pork from the United States, half the Canadian market demand.
The pork council president said the industry is in the third consecutive year of reeling from unexpected shocks – a high Canadian dollar several years ago followed by sharply more expensive feed stocks and now a world-wide recession that is making credit difficult to obtain and softening export markets.
Now comes the threat of new United States protectionism and other protectionist measures around the world.
CPC executive director Martin Rice offered MPs an example of market access problems that have nothing to do with the U.S. and country-of-origin labelling.
“We shipped 50,000 tonnes of hams into Romania the year before it joined the European Union,” he said. “It’s zero now. That’s the way it has gone.”
And as one of the world’s largest hog traders and the most dependent on trade, he said access to new markets is critical. It is why the CPC supports bilateral trade negotiations but more importantly, wants to see World Trade Organization talks resume.
