“We all know that our industry is in dire straits and unless we can get access to this money, it’s going to be going down the hill even quicker.”
Alberta Pork wants feedback on how federal hog industry assistance programs are working in practice, chairman Herman Simons told one of a series of regional meetings here last month.
Several banks have signed on to a loan program which allows producers to borrow funds with federal guarantees.
“When these banks give you a loan, they will get 40 per cent of that loan in their account as cash,” said Simons. “Based on that, they have to guarantee the loans to producers at 90 per cent for the first three years, at 70 per cent from year three to year five and at 60 per cent after that. It’s up to the bank to determine the interest rates, so you will have to negotiate that with the bank.”
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Maximum loan amounts include $85 for market hogs in a farrow-to-finish operation, $35 for weaner pigs and $25 per isoweaner. If producers get the federal loan, their Alberta Pork loans are removed. “That money needs to be repaid and they take that out first,” said Simons.
He advised all producers to inform Alberta Pork about their experiences with this loan. “We all know that our industry is in dire straits and unless we can get access to this money, it’s going to be going down the hill even quicker,” he said. “It’s very important for Alberta Pork to know what the communication from your bank is back to you, and whether it’s positive or negative.”
A second part of the federal assistance is a Hog Farm Transition Program that allocates $75 million dollars for producers who wish to leave the industry. In order to qualify for the program, producers need to be in active production since April 1, 2009, with business structure in place as of August 1, 2009. Producers who are in bankruptcy procedure are not eligible.
Producers may apply for both the federal loan program and the hog transition program, but are not eligible to be involved in both at the same time. The first tender for the transition program was administered at the beginning of November. As of November 3, 443 producers nationally had registered for the program. The second tender date was scheduled for December 9. Producers who are accepted in this program have to stay out of the industry for three years. As of the beginning of November, there were about 22 accepted bids from Alberta pork producers who wanted to get out of the industry.
A third component of federal assistance is $17 million to Canadian Pork International to develop international markets.
