New rules for the federal advance payments program (APP) that could spot livestock producers up to $400,000 each are on the table for Canada’s livestock producers, pending approval by the House of Commons.
Federal Agriculture Minister Gerry Ritz announced Monday that legislative amendments for the program have just been tabled, at the same time as he announced a program to cull back the size of Canada’s swine breeding herd by 10 per cent.
These plans and other proposals also announced Monday in Ottawa were welcome news to Canada’s main cattle and hog producer groups.
“We’re very pleased with this because it does provide liquidity for individuals to make more sensible decisions than they would in a forced situation,” Hugh Lynch-Staunton, president of the Canadian Cattlemen’s Association (CCA), said on a conference call with Agriculture Minister Gerry Ritz and Canadian Pork Council (CPC) chief Clare Schlegel.
Amendments to the Agricultural Producers Marketing Act, tabled Monday in the minority House of Commons, will:
- remove the requirement for livestock producers to use a business risk management program, such as AgriStability, as security for a cash advance, and allow livestock producers to use their inventory as security;
- add “severe economic hardship” as a condition to offer emergency advances; and
- revise the security requirements for emergency advances and raise the maximum emergency advance from $25,000 to $400,000 in conditions of severe economic hardship.
The difference between these amendments and “program improvements” announced in December is that these advances won’t be clawed back as soon as a producer triggers a CAIS payment, Ritz said.
APP cash advance limits are $400,000 and up to $100,000 is available interest-free, the government said. Advances to hog producers will be based on the number of animals they expect to raise for sale for a 12-month period. The repayment period will start a year after the producer gets the advance and must be repaid within a production period to be determined under the APP.
If the proposed amendments get sufficient support from the opposition parties and the Senate, funds could flow to producers next month, Ritz said. Between these changes and the program changes in December, he said, producers can access up to $3.3 billion in advances.
If the opposition parties support the move, there’s no reason the Senate couldn’t push through these amendments within a week, Ritz said, adding that he would make himself available for a committee hearing if need be, as would the CCA and CPC chiefs.
Breeding swine cull
The government, through its planned cull breeding swine program, hopes to cut the size of Canada’s breeding herd size by up to 10 per cent beyond normal annual reductions to “help restructure the industry to bring it in line with market realities.”
Specifics are still to come on the $50 million program, which will be administered by the CPC. It will grant hog producers to receive a per-head payment — Ritz quoted a figure of $225 per breeding sow — for each animal slaughtered “in a humane manner,” and reimburse producers for slaughter and costs of disposal in keeping with environmental requirements in their area.
Eligible hog farmers must agree to empty at least one barn, and to not restock for a three-year period.
The CPC’s Schlegel said the council expects the market “will come back with an appropriate response” to such a shift in supply and demand.
The program will also be retroactive to Nov. 1 last year, Ritz said.
Asked whether the APP revisions and cull program will provoke trade action from the U.S. livestock industry, Lynch-Staunton replied that while any new move is likely to raise trade flags, “we don’t think there’s a significant subsidy in the program to bother (the Americans) very much.”
Ritz added that the APP changes are simply a “rejigging” of an existing program and less likely to provoke a countervail than would a new aid program.
Further, the government said it will work with industry and review meat inspection user fees over the next couple of weeks to assess the impact of the fees on competitiveness in the sector.
The government is also “working to reduce costs and increase competitiveness under Canada’s enhanced feed ban,” in tandem with its previous pledge of $80 million to help the industry adjust to new feed standards.
(Correction: an earlier version of this story indicating the government had not attached a specific figure to the cull breeding swine program was incorrect. The government has budgeted $50 million for the program.)