The federal government has announced a retroactive change in the rules for the Cull Breeding Swine Program that the industry says could send more than $4 million to producers.
On March 18, agriculture minister Gerry Ritz announced that the $225 per head payment to hog producers who cut their breeding herd would apply to some of those who liquidated part of their herds before the cull program took effect.
Gary Stordy, public relations manager for the Canadian Pork Council, which administers the cull program payments, said as many as 20,000 head culled before the program took effect Nov. 1, 2007, could now be eligible for payments.
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“That is just a working number – between 15,000 and 20,000,” he said.
At the upper end, it would mean producers originally excluded because they liquidated some of their herd before program eligibility kicked in could receive up to $225 per head of culled breeding stock.
The original program, which was announced in the 2008 federal budget, was aimed at reducing the breeding herd to reduce domestic supply and strengthen Canadian prices during a period of severe hog industry losses.
A total of $50 million was set aside to compensate producers who culled breeding hogs between Nov. 1, 2007, and Nov. 30, 2008.
However, Stordy said the hog industry has lobbied the government to change the eligibility period because a number of producers began to liquidate some of their breeding stock before the program took effect.
“In some areas of the country, particularly in the Maritimes and the coast, feed costs are higher because it has to be brought in from other provinces so they were feeling the effects earlier and began to react,” he said.
Last week, the government recognized that concern by allowing producers who liquidated breeding stock between Aug. 1, 2007, and Oct. 31, 2007, to apply for compensation.
The same conditions apply as in the original program. Producers receiving payments must have emptied at least one barn and agreed not to restock for at least three years.
Under the original program, the slaughtered hogs were to be kept out of the food chain so as not to depress prices. Those restrictions may not apply to producers who acted before the official program started.
Stordy said some questions remain about how many producers will be eligible, what the rules will be and the payment calculation.
He said up to $10 million of the original budget of $50 million remains unspent.
Ritz said in a statement announcing the program extension that it is an attempt by the government to help producers “weather this global economic storm. Some pork producers made tough business decisions to reduce their herds before this program started. We’re changing the program to make sure those producers get the support they deserve.”
The original plan was to reduce the breeding herd by up to 10 percent.
Producers who made their cuts in the months before the official program started have until June 30 to file their claims through the pork council.
