Pig Farmers Need Help Now

Owen Roberts had an excellent piece in the Guelph Mercury Monday. It's worth reading the whole article, but it starts off especially strong:

Canada's economy has traditionally relied on manufacturing and natural resources, particularly forestry and agriculture. So when the global recession hit, Ottawa started coming through with support. The auto sector teetered on the brink of collapse; Canadians shelled out $10 billion. Then last week, forestry received $1 billion.

And as for agriculture -- especially the export-dependent pork industry, which has been ravaged through no fault of its own by the economic crisis, a strong Canadian dollar, trade restrictions, and the ill-named swine flu (H1N1) -- well, it's still waiting.

That's baffling. Canada's pork producers are struggling, and it seems as if they're encountering more brick walls than support.

The Canadian pork industry generally, and the Ontario pork industry specifically, are efficient, modern and productive providing safe and healthy food for Canada and the world. The industry is constantly reinventing itself with a recent emphasis on traceability and animal welfare. Producers are also responsive to market signals with Ontario's breeding herd decreasing by nearly 20% since it's recent peak in 2004 as producers responded to low returns that were driven first by a strengthening Canadian dollar and then by high feed costs driven by US ethanol policy and high oil prices.

The most recent shock to the industry has come on the trade front through American Country of Origin Labelling (COOL) legislation and now loss of access to key export markets because of the H1N1 impact. Hog prices are close to $50 per head less than would have been predicted by futures markets before H1N1 hit the news at the end of April, so hog farmers are losing everything during a time when the industry was predicting a return to profitability.

Now it's not just pig farmers at risk, suppliers such as feed mills, trucking companies, and genetics suppliers have already had to downsize with more losses possible. Hog processing facilities, and other food production businesses like bacon and ready made sandwiches will soon be threatened by a lack of supply. Prices to consumers could shoot up dramatically and we may become dependant on US pork imports, which have less stringent health regulations.

An immediate cash hog payment will help the industry right size and emerge from this current crisis even stronger. Unfortunately the Federal Agriculture Minister doesn't seem willing to help. As Mr Roberts said, "That's baffling."