Cutting sow numbers part of federal plan to help red meat producers

Tuesday, February 26, 2008

by MARY BAXTER

Announced Monday in Ottawa by Ag Minister Gerry Ritz, the measures are aimed at helping producers like McLean. Initiatives, include:

• Changes to a federal advance payments program to make it easier for livestock producers to qualify for emergency loans by permitting them to use their livestock as security rather than business reference margins;
• Raising the limits on these loans to $400,000 from $25,000, extending an existing interest-free clause on the first $100,000 to the emergency loans and also extending the period before repayment begins to a year from six months;
• Introducing a $50 million sow cull program to be administered by the Canadian Pork Council. (The program is retroactive to November 2007 and offers up to $225 a head as well as reimbursement for slaughter and disposal on the condition producers empty at least one barn and not restock it for three years);
• Reviewing meat inspection fees to evaluate their impact on the livestock sector’s ability to compete;
• Reducing costs and increasing competitiveness under the Canadian enhanced feed ban.

Clare Schlegel, president of the Canadian Pork Council, said the measures would give producers “breathing room” while they figure out how best to adjust to market conditions.

That’s also how Hugh Lynch-Staunton, president of the Canadian Cattlemen’s Association sees it. The cash advance program improvements will provide “the liquidity for individuals to make more sensible decisions than they would have to do in a forced situation,” he said.

McLean says reduced production only solves one part of the industry’s woes. He’d like to see measures in place to combat the effects of ethanol on livestock production: increasing grains and oilseed costs and reduced availability of these for feed.

He also pointed out producers continue to face the daunting challenge of competing not only with hog producers from elsewhere but also producers of other meat products.

With commodity prices’ continued rise “it’s very difficult to make business decisions in that environment.”

Ritz said the goal was to have the money flowing by March.

He attributed the motivation for the changes to producers expressing concerns about problems with emergency funding announced in December. “They were taking it in with one hand and then losing it as soon as they triggered a payment under CAIS,” he said. BF