Producers get $3.3b in assistance

The federal government has announced long-awaited changes to an assistance program that will provide up to $3.3 billion in advance payments for Canadian livestock producers.

But while welcomed, industry members say its nothing new and comes on the eve of the federal budget (Feb. 25).

It was announced long ago, but has taken until now to implement the changes allowing producers to access cashwhich has to be paid back in 18 months.

It will be helpful, but this is not some kind of a cash gift, said Darlene Sandford of the PEI Cattlemens Association.

If a producer signs into this program, he or she gets a bill halfway through 2009 for repayment and if markets havent changed it might not be very pretty.

Malpeque MP Wayne Easter says its a start and believes the pressures generated about losing agricultural industries and a domestic food supply may have forced the Conservative government to act.

The ministers response today (Feb. 25) was due to extreme pressure from the industry.

According to the Canadian Pork Council, the country has lost about 15 per cent of production in the past few months and dozens of large PEI hog producers have given up since last fall and sold stock and left the industry. And with the local hog processing plant in jeopardy, hog producers will be hard pressed to take on more loan and debt with such a shaky future ahead.

Its a great program as long as prices are up a year and a half from now and you can start paying back, said one hog producer privately. I dont know what to think at this point.

Beef producers are also in a perilous state, but with Maritime governments promising $12 million to help the new Atlantic Beef plant find a niche, there was more hope. The advance payment changes now provide some relief to the tremendous pressures brought to bear with the high cost of production and the high Canadian dollar which has reduced the competitive edge for Canadian producers.

The amendments to the Agricultural Marketing Products Act introduced by Agriculture Minister Gerry Ritz allows producers better access to cash advances that have been available to grains and potato growers for years.

Canadian livestock producers are struggling with high costs and a high dollar, but these kinds of short-term struggles can strike any sector, said Ritz.

The Advance Payment Program will ensure producers now can access up to $400,000 in repayable advances.

If we dont make any money over the next 18 months its nothing but a loan, said Sandford, a Mont Carmel beef farmer. Its good news, but there are other places (to) go access money and I would advise any producer to go in with eyes fully open. You could wind up with an even bigger financial hole.

Bill C-44 allows producers to use inventory as security on their farms, recognizes severe economic hardship as a condition for emergency advances and raises security requirements.

(This article was originally published in The Guardian.)