Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

August 15, 2009 14:25 ET

Government of Canada Delivers Support for Hog Industry Restructuring

STRATFORD, ONTARIO--(Marketwire - Aug. 15, 2009) - The Government of Canada is delivering a comprehensive restructuring plan for pork producers by investing in key marketing initiatives to get more customers buying Canadian pork, providing government-backed credit to help viable operations weather the current economic uncertainty and helping struggling operations to transition out of the industry.

"Hog producers can be profitable again, but we have to face some tough realities if we are to make our Canadian pork industry lean and competitive," said Larry Miller, Agriculture Committee Chair on behalf of Federal Agriculture Minister Gerry Ritz. "Our Government is working with the pork industry to help hog farmers recover or exit the industry, and to help the industry take advantage of new market opportunities."

The new initiatives being announced today include:

- An International Pork Marketing Fund of $17 million for market research, promotion and access initiatives to find new customers for Canadian pork products.

- Long-term loans with government-backed credit that financial institutions can offer to allow viable hog operations to restructure their businesses. These long-term loans will be provided at market rates. Producers with sound business plans will be able to access short-term credit for operating costs such as feed and payroll.

- A Hog Farm Transition Program to allow producers to tender bids for the amount of funding they need to transition out of the hog industry and cease hog production for at least three years. This program will invest up to $75 million to gradually reduce production and oversupply issues.

Agriculture and Agri-Food Canada officials are working closely with the pork industry and financial institutions to finalize program details. These new initiatives respect Canada's commitments made under international trade agreements and ensure Canadian pork producers will continue to have access to market opportunities around the world.

"The realities of the new markets are such that Canadian pork producers have to restructure and streamline their operations. We will stand behind them throughout what can be a difficult process," said Gary Schellenberger, MP for Perth-Wellington. "We will continue to work with pork producers as they make the tough decisions required to realign the industry in order to achieve long-term success."

Detailed program information will become available over the next few weeks. For more information, visit www.agr.gc.ca.

BACKGROUNDER

International Pork Marketing Fund

The International Pork Marketing Fund will provide $17 million in funding to Canada Pork International to bolster critical market development and activities to capture greater value from export markets, and to help address the pork exports losses resulting from trade restrictions. The objective is to undertake strategic activities to recover markets lost due to the H1N1 virus, reposition for sales of higher valued products, to build markets and gain recognition for Canadian pork products, to increase market access for Canadian pork products, and to enhance export capacity in response to industry-identified needs.

Long-Term Loans

Long-term loans will be provided by lending organizations. The Government of Canada will share the loan loss risk. Lending organizations will be required to ensure that the borrower had a credible business plan demonstrating potential to maintain a viable agricultural operation that will allow for repayment. The loans would be first used to reimburse any outstanding Advance Payments Program (APP) emergency advances under the 2008 stay of default, if the borrower holds such an advance. Additional funds could be used to address liquidity issues or make the investments required to achieve long-term profitability. Overall program parameters and details will be negotiated with stakeholders and lending organizations.

Hog Farm Transition Program

The Hog Farm Transition Program will provide up to $75 million to help producers who wish to transition out of the industry. Hog producers who agree to keep their barns out of production for a period of at least 3 years would be invited to bid for a place in the Hog Industry Transition Program. In exchange for a contract to keep barns empty and ensure that it was not used in any way in hog production for a period of 3 years, the producer would accept a negotiated amount, based on the annual productive capacity of the barn. Bids would include a timeline for disposing of current herds. Administrators will accept bids based on cost impact and an orderly flow of animals to market.

Contact Information

  • Agriculture and Agri-Food Canada
    Media Relations
    Ottawa, Ontario
    613-773-7972 or 1-866-345-7972
    www.agr.gc.ca
    or
    The Office of the Honourable Gerry Ritz
    Meagan Murdoch
    Press Secretary
    613-759-1059