Ag Ministers Mull Swine Herd Reduction

Canada’s agriculture ministers may consider a massive sow cull program in an effort to help save the nation’s struggling hog industry.

The cull is part of a three-point industry transition plan which the Canadian Pork Council proposed recently to the federal government.

The proposal calls for Ottawa to pay producers $500 per sow, plus the market value of the animals. In return, producers would keep their barns free of breeding animals for three to five years.

The CPC calls it a “hog farm transition payment program” and says it’s essential to helping debt-burdened producers leave the industry without losing their farms, homes and animals.

Federal Agriculture Minister Gerry Ritz hinted last week he and the provinces may look at the idea, although he stressed any assistance to hog farmers must be trade neutral.

“(W)e have to stay within (the) existing program framework and remain non-countervailable,” Ritz said at a news conference to wrap up the agriculture ministers’ annual conference in Niagara-on-the-Lake, Ontario last week.

But he added: “We are looking at some other venues for the hog sector as well… (I)n the last 10 years we’ve doubled our production with a shrinking market around the world. (Producers have) analyzed that. They’ve realized that. We’re starting to talk about how do we bring the sector into the realities of the new marketplace.”

Lowering production is central to the CPC’s five-year plan to “right size” an industry which produces too much and receives too little.

Looking forward to 2014, the council aims at reducing total production, increasing the domestic pork market and exporting fewer live animals.

Its goals include:

Increasing domestic pork disappearance by 25 per cent to 730,000 tonnes a year;

Reducing live hog exports to the U. S. by 57 per cent to four million head annually;

Lowering Canada’s dependence on the U. S. market to just 20 per cent of pork exports;

Decreasing domestic hog slaughter by one per cent to 21.5 million hogs;

Reducing total hog production by 18 per cent to 25.5 million head.

The pork council does not put a dollar figure on the proposed sow cull program. But it’s bound to be more costly than the federal Cull Breeding Swine Program in 2008 which paid $225 per animal and budgeted $50 million.

That program ended up spending only $35 million because many producers held on to their animals hoping for a market recovery that didn’t come. But it still reduced the national breeding herd by eight per cent.

The other two points in the CPC’s plan include: a so-called H1N1 recovery plan to loan producers $30 for each market hog shipped in the first quarter of 2009, and adjustments to emergency payments under the advance payments program.

In its presentation, the pork council admits unbridled production, which prevailed in the 1990s and early 2000s, is no longer sustainable.

It also acknowledges straight-ahead financial aid to struggling hog farmers is not the answer, either.

The only thing left is a controlled transition to a smaller industry and avoiding a rush to the exits, the council says.

“It is understood that it is not in Canada’s interests to simply prop up the industry in an attempt to maintain the status quo,” the CPC presentation reads.

“However, it would be damaging to Canada’s interests in terms of its economic prospects and rural viability if the productive capacity of the Canadian hog industry was to implode. It could recede to a level that threatens too many direct production and processing jobs, export sales and the exploitation of new technology development opportunities.”

Ritz signalled an announcement on the CPC’s proposal could come soon.

“My officials and officials from CPC have been working day and night to promote that forward, to see how we make that work, what the actual cost to the fiscal capacity of the federal government and then some of the provincial governments will and could be,” he said.

“Certainly, we’ll be looking at it seriously. We realize the urgency of this. I have told Jurgen (Preugschas, CPC chairman) to stay tuned. I want something to be able to come back to him within days as well.”

Karl Kynoch, Manitoba Pork Council chairman, said his producers have lobbied politicians intensively since a rally last month in Morris urged them to do so.

“It looks as if government realizes they’ll have to do something,” Kynoch said. “(But) right now, there’s no hint of anything.” [email protected]

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