News Release
Saturday Aug 15 2009Government of Canada Delivers Support for Hog Industry Restructuring
WINNIPEG, Manitoba, August 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.
"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 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.
"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."
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.
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