February 16, 2004



EU Pork Subsidies Detrimental To Canada Hog Industry


Canada Pork International (CPI) believes that the European Union's actions will be detrimental to the Canadian hog industry.


The EU is using two programs to backstop its pork industry on the export front. One is the private aid storage program, which is about to end.

It allows European producers to store product while they wait for Japan to lift domestic safeguards April 1. The second, a temporary reinstatement of export restitutions, primarily targets Russia, and effectively lowers the export price of EU pork.

CPI Executive Director Jacques Pomerleau says the combination of subsidies will hurt Canada.

"There are two key dates here. One is when the Japanese safeguard will be lifted on April 1 and what is worrying is that, if the Europeans are shipping massive Quantities during the early period from April to June, then it means that the safeguards will be triggered again in July or August.

That is very worrying. Also what kind of volumes the Europeans will be able to ship to Russia before April 30 because those restitutions are supposed to end at that date.

What it means is, the two combined together, implies that the Europeans wish to export as much as they can before the enlargement of the European Union on May 1."

Pomerleau says the two programs, especially the first which will allow the EU to be more competitive in Japan and the second which will create opportunity in Russia will have an impact.

He says, when you factor in uncertainty created by BSE and Avian Flu, it remains to be seen what might unfold over the next couple of weeks.