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Financially Strapped Hog Farmers Seeking Tax Relief

Manitoba’s financially stressed hog farmers are asking the provincial government for tax relief as barns shut down and producers leave the industry at an accelerating rate.

The Manitoba Pork Council wants the province to waive municipal taxes on hog barns this year, saying many producers just can’t afford to pay.

MPC made its appeal in an October 13 meeting with provincial officials.

Rural municipal tax bills in Manitoba usually fall due at the end of September or October.

The pork council suggests several options. The government could apply an education tax rebate on farm buildings, the same as it does on farmland. Or it could waive the portion of taxes applied on livestock barns and reimburse municipalities for the amount, said Andrew Dickson, MPC’s general manager.

The council is waiting for a response from the province. Dickson said he hopes to have something to tell producers at MPC’s annual round of district meetings which begin Nov. 9.

REDUCED ASSESSMENT DELAY

The provincial assessment branch will reduce assessment values for livestock barns by 25 per cent if they have been empty for a year, but not before that.

Some municipalities are acting on their own. The Rural Municipality of Hanover recently reduced assessment values on livestock barns by 10 per cent assessment for some 30 livestock producers appealing their 2010 property assessments. They were in the process of emptying their barns and felt the assessments did not reflect actual values, said Doug Cavers, Hanover’s chief administrative officer.

Hanover has among the most hog barns of any Manitoba municipality. Councillors granted the 10 per cent reduction to “send a message about what was happening in the agricultural industry,” Cavers said.

The tax appeal comes as Manitoba’s hog industry continues an unprecedented decline.

Producers are liquidating herds and closing barns at an increasing rate because they can’t afford to keep them open, said Karl Kynoch, Manitoba Pork Council chairman.

“They’ve just simply run out of money to feed the animals. With a very negative-looking next 12 months coming, they’ve just finally had to make that business decision and shut down,” Kynoch said.

BUSINESS DECISION

But it’s hard to get accurate figures because things are happening so fast, he said.

“On a daily basis, producers are deciding whether to stay in the business or get out. Until a lot of the smoke clears from this, it’s going to be a challenge to get a good handle on numbers.”

Statistics Canada last week released figures to show the number of pigs on Manitoba farms on October 1 was down 9.7 per cent from the previous year. Sow numbers were down by 3.4 per cent.

Most dramatically, the number of weanlings (pigs under 20 kg) plunged by 28 per cent, reflecting herd liquidation and the drop in sow numbers.

At the same time, the number of finisher pigs (over 20 kg) rose 2.3 per cent, suggesting producers are raising more pigs to slaughter weights and not selling them as isoweans.

The hog industry is also downsizing across the country. Statistics Canada reported a 7.3 per cent cross-Canada

“They’ve just simply run out of money to feed the animals.”

– KARL KYNOCH, MPC

drop in hog inventories between the third quarter of 2008 and the third quarter of 2009. The number of hog farms nationally fell by 10 per cent in that time.

Manitoba had 800 hog farms on October 1, down from 880 farms in 2008 and half the number seven years ago, StatsCan estimates.

Things aren’t likely to improve any time soon. Futures markets don’t indicate profitability until 2010. The U. S. country-of-origin labelling rule is choking off live hog and weanling exports. Add fallout from negative consumer perceptions about pork from the so-called H1N1 “swine flu” and producers are losing $50 on every slaughter hog they raise, said Kynoch. [email protected]

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