September 12, 2020

Canadian pork sector wants higher compensation rate for losing hog producers

The chair of the Canadian Pork Council has called for the "fixing" of AgriStability, a business risk management programme under the Canadian Agricultural Partnership, which protects Canadian producers against large declines in farming income due to production loss, increased costs and market conditions, among others.

Rick Bergmann, in a letter sent recently to the country's agriculture ministers, said producers are facing "unprecedented volatility and loss" due to COVID-19, and that "fixing AgriStability is essential to helping farmers stay in business".

Bergman, a Manitoba hog producer, described AgriStability as "a broken programme that offers too little support to make a difference when farmers are facing a financial disaster like they are with COVID-19".

He offered a "simple solution", which is to leave the trigger at 70% but increasing the compensation rate to 85%. "Doing so would retain AgriStability as a disaster programme, respect Canada's trade obligations, significantly reduce the cost to governments, but still provide additional support to those who are facing extreme loss", he said.

He added that increasing the compensation rate to 85% would make a significant difference for producers who need it most. "It will increase payments by 20%, but ensure those payments are only received by those facing substantial loss".

An article published by Alberta Farmer explained that AgriStability uses a farm's profit history and that when it falls to 70% of average profit (the reference margin), it pays out 70 cents on the dollar for every dollar below that level. "The call in recent years has been to restore the reference margin to 85 per cent (which it was until 2013)", it stated.

Gary Stordy, the pork council's director of government and corporate affairs, meanwhile, warned that without reform to AgriStability, hog producers would start to leave the sector.

"There's consequences for that. If governments are turning their backs on producers, we're going to have less producers raising hogs in Canada", he was quoted as saying in the Alberta Farmer report.