Manitoba’s provincial government will offer beleaguered hog producers $60 million in new loans and a loan-deferral program for the province’s cattle producers.
The province, through its Manitoba Agricultural Services Corporation (MASC), will provide the hog loans at “attractive” interest rates to help producers facing “significant cash flow challenges,” the Manitoba government said in a release Thursday.
Hog producers will be able to borrow $35 per slaughter hog and $10 per weanling sold between Oct. 1, 2007, and May 31, 2008. Loans will be termed over eight years with the maximum amount being $2.5 million.
Principal payments on the loans will be deferred for the first three years. The first-year interest rate will be 2.25 per cent on borrowed amounts of up to $1.5 million with 4.5 per cent charged on any remaining loan amount, the province said.
The hog loans will all have an interest rate of 4.5 per cent for years two and three and six per cent for the last five years. Young farmers can get an added interest rate reduction of one per cent for the first three years.
“There are large numbers of farm families in the hog industry who are suffering emotionally because of
the current crisis,” said Karl Kynoch, chairman of the Manitoba Pork Council, in a separate release. “This loan program will provide some relief for those families.”
Record-low hog prices, increasing feed costs and a rising Canadian dollar add up to losses per pig that now run around $50 to
$60 a head, forcing many Manitoba farm families to close their barns after generations of hog farming, the council said. The loans will give hog producers “some financial breathing room until prices can recover.”
Through the Manitoba Pork Credit Corporation, the pork council recently launched a cash advance
program that allows hog farmers in the province to take advantage of the federal agriculture advance payments program. The provincial funding will complement that program, the council said.
BSE loan deferrals
Meanwhile, the new loan-deferral initiative for cattle producers is meant to help them improve cash flow, the province said.
MASC will defer principal payments on existing BSE recovery loans for three years, with principal and interest obligations due to resume in the fourth year.
In a related announcement Thursday, cattle producers in the Riding Mountain Eradication Area in the province’s northwest, who are required to have their cattle tested for tuberculosis (TB), will get provincial assistance of $6 per head.
“The provincial contribution of $240,000 represents 40 per cent of the costs related to TB testing,” the province noted in its release. “The province will encourage the federal government to provide the remainder of the funding.”
But a federal top-up may not be in the cards. An Agriculture and Agri-Food Canada regional director told the Manitoba Co-operator last month that financial aid related to TB testing will have to come through regular ag support programs because the department does not support a special fee.
The Manitoba Cattle Producers Association has lobbied both Ottawa and the province for years for a special per-head mustering fee to cover Riding Mountain-area cattle producers’ costs for assembling their herds for TB testing. The association said in December that it would help fund such a fee if Ottawa and the province do the same.
The TB tests themselves are funded by the Canadian Food Inspection Agency, but producers are on the hook for mustering their animals.
Producers say the job, which requires each animal to be put through the chute and checked twice in three days, costs them in terms of hiring help as well as the stress it causes for pregnant cows.