August 17, 2009

Canadian government unveils hog support programme

Canada has unveiled a hog and pork support programme that will aid with the downsizing of the hog herd and encourage new marketing programmes, according to government officials.

The programme was outlined by Agriculture Minister Gerry Ritz at a livestock research facility at the University of Manitoba near Winnipeg.

The programme has three components:

A C$17 million (US$15.39 million) Pork Marketing Fund will be administered by Canada Pork International to encourage expanded pork exports to offset pork markets lost due to AH1N1 flu virus. It is also aimed at offsetting lost sales due to trade disruptions, such as the US Country Of Origin Labelling (COOL) requirement.

The second component offers government-backed long-term loans to hog producers who can provide "credible business plans" to lending authorities. The loans would first be used to repay any advances under the Advance Payment Programme. After that the monies could be used to address liquidity issues or make long-term investments to make the operations profitable.

The third component is the Hog Farm Transition Programme, which will see C$75 million allocated to help producers who wish to leave hog production. The producers would need to keep out of the hog business for three years. They would negotiate the payment and time line for the programme with programme authorities, which would consider the impact on the orderly flow of animals to the market.

The new government initiative is in response to the collapse of the Canadian hog industry due to the AH1N1 flu scare, the US introduction of COOL and the negative impact of the global recession. Contributing to the hog industry problems have been the high cost of feed, analysts said.

US$1 = C$1.10 (August 17)