“We would expect the Manitoba government to do the same thing.”
– ANDREW DICKSON, MPC
Manitoba pork producers are carefully watching a proposed hog price insurance program in Alberta to see how it plays out.
If it goes into effect and if it works, producers will demand the Manitoba government implement a similar model.
“If it’s a successful model and it helps producers in Alberta and their government is prepared to help out, we would expect the Manitoba government to do the same thing,” said Andrew Dickson, Manitoba Pork Council general manager.
Alberta Pork, in partnership with the provincial Agriculture Department, last winter commissioned a feasibility study into a Hog Price Insurance Program (HPIP) for its producers.
It’s proposed that HPIP would insure producers against market price drops, based on a level of coverage. Producers would buy premiums which are set daily and vary according to coverage levels. They could insure all or part of their production. If the sale price is lower than the coverage level, a payout would be triggered.
The program is based on a similar price insurance program for Alberta feeder cattle called Cattle Price Insurance Program (CPIP). Gibson Capital of Calgary, the same firm that designed CPIP, developed the hog model.
Introduced in September 2009, CPIP currently covers 13 per cent of the feeder cattle in Alberta. The Alberta
government backstops the program by guaranteeing its liabilities should an unforeseen disaster cause markets to collapse.
Dickson said it remains to be seen how HPIP would work for the hog industry. Manitoba producers already have several risk management programs available to them through Maple Leaf Meats and the Manitoba Pork Marketing Co-op.
HPIP would need to provide advantages not available through other programs to be successful in Manitoba, Dickson said.
Government guarantees, such as the one for CPIP, would be crucial to the program’s success, he said.
CPIP has raised concerns in other provinces that the program could offer financial advantages to Alberta cattle feeders which producers in the rest of Canada do not have.
Gary Stordy, a Canadian Pork Council spokesperson, was cautious when asked if pork producers outside Alberta felt the same way.
Stordy said a CPC safety net committee has reviewed the HPIP concept but formed no opinion on it so far,
But if HPIP works in Alberta, the pork council would like to see it used as a template for a national program, he said.
“If this is a provincial-only program and it works for the hog sector, it would be ideal if some of the other provinces would follow suit in implementing a similar program or work together to implement it nationally.”
The Canadian Cattlemen’s Association has asked the federal government to make CPIP national. The government has not committed to it. [email protected]