If you have been watching the Winter Olympics coverage, you are no doubt aware that there are many ways to cross a finish line, and that some are somewhat more painful than others. Podiums and medals await the winners, but there is no cheering reception at the bottom of the hill for those who stumble and crash.
Many of the final participants in the Hog Transition Program may also come to know the agony of defeat. Since its inception in October 2009, three bidding auctions have taken place with the fourth and final auction slated for March 10.
While 336 bidders have been accepted to share $61 million of the $75-million budget, that’s only half the bidders who have been part of the government’s process of finding the lowest possible amount for which people are willing to shut the barn doors.
The first bid was held Nov. 4 and accepted 74 of out of 261 bids. This should have left 187 bidders, but with new applications, 469 bidders registered for the second auction Dec. 9. When the Jan. 20 auction took place, those 352 remaining bidders had been joined by another 51 new bidders, resulting in 403 active bids.
Out of the 403 bids placed, 145 were accepted, leaving 258 unsuccessful bids. If the trend of new entrants joining continues, we can expect the March 10 auction to attract somewhere between 300 and 400 bidders.
The Hog Transition Program has been successful in attracting producers who want out of a wounded industry, but it hasn’t accepted the responsibility of completing a fair process.
Out of the $75 million proposed budget for the program, only $14 million remains for the final bid. Considering that the second auction accepted 117 bids and the third auction accepted 145 bids (262 total bids) to use almost $50 million, the remaining $14 million is nowhere near what is required to finish the process for the 300-plus remaining producers.
Our federal government entered into a market process to establish a fair market price for herd reduction. That process has given us a weighted average of $925.42 per animal unit equivalent. Now that the price has been determined, there needs to be a legitimate way to end the process.
To continue to allow new bidders to join into the auction without increasing the funding, is to create a free-for-all that pits producer against producer. When it became obvious that the demand had exceeded the budget, new entrants should have been limited.
There are now 300 entrants who have done the due diligence in completing the necessary paperwork and submitted their bids according to the rules, whose work has been part of the process of establishing the fair price. But many will be left out in the cold.
For them, this will become but one more Canadian support program that is a net expense to the producer instead of a benefit. They have, in effect, been used by the system, but will receive no compensation.
To bring this program to a legitimate conclusion, the process of adding new bidders needs to be finalized and enough funds added to the budget to allow the remaining bids to be bought out.
At the very minimum, remaining bidders should be allowed to accept or decline the $925 weighted average. Expecting producers to battle it out for a cutthroat finish is only bringing an unconscionable end to a questionable process; it lacks the integrity we should be demanding for our farm programs.
The crowd at the podium should be cheering and not watching the entrants bleed. Les McEwan farms