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Canadian Govt Supports Hog Industry Restructuring

by 5m Editor
17 August 2009, at 8:02am

CANADA - 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.

"We know Canadian hog producers can become profitable again, but we have to face tough realities to make our pork industry lean and competitive," said Agriculture Minister Gerry Ritz. "Some operations simply aren't viable any more and we are going to help them transition out of the industry and reduce production. Some operations need access to credit to weather the current economic storm and we are providing government-backed loans to help them restructure. Farmers want to make their living in the marketplace and we're investing in marketing to find new customers for Canadian pork and make our pork industry successful for the long term."

The new initiatives announced on Saturday (15 August) 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.

"We're standing with Canadian pork producers as they restructure and streamline the industry to adjust to new market realities," said National Revenue Minister Jean-Pierre Blackburn, who also serves as Minister of State for Agriculture. "These investments will rebuild the Canadian pork industry for the long term and we will continue to work with pork producers as they restructure their operations."

CPC Pleased with Government's Commitment

Canadian pork producers are pleased to see the federal government’s commitment to the hog industry through the launch of the above programs.

"The impact of the world pandemic caused by the H1N1 virus has delayed the prospects for price recovery in hog markets. This is the latest blow to an industry that has faced serious challenges over the past few years, including high feed costs, high exchange rates and US public policies," says Jurgen Preugschas, Chair of the Canadian Pork Council (CPC). "The industry has responded through dramatic re-structuring and a commitment to a Strategic Transition Plan. Today, the government is lending a hand."

The International Pork Marketing Fund, the third program, will build a strong foundation for the future of the industry by helping to drive demand for Canadian hog and pork products with Canada’s international trading partners.

"CPC will continue to work closely with Agriculture and Agri-Food Canada and will continue to respect our working relationships with the international community," says Mr Preugschas. "As the transition plan is implemented, a leaner, greener and more innovative industry will emerge – one that is prepared to capitalize on both domestic and international opportunities."