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Arbitrary Caps on Farm Support Programs Devastating Canadian Pork Industry
CAIS Administration Error Turns into Cruel Joke for Province's Struggling Pork Producing Families
Sask Hog Industry Receives Short Term Hog Loan

Stomp Pork Farms (SPF), Saskatchewan's second largest pork producer, employing more than 250 people, filed for bankruptcy protection this week. The company hopes this will provide the time it needs to develop a plan to satisfy creditors and get the organization back on solid financial footing. SPF will maintain business as usual over the short term and is working on a plan to restructure its debt with creditors.

Saskatchewan's pork producers have continued the daily struggle to stay afloat during the worst financial crisis they have ever experienced. They are incurring losses in excess of $40-60 per pig produced. While recently announced federal and provincial safety net programs are helping many producers cope, the caps on the three major support programs available seriously disadvantages the industry's larger operators.

SPF's current financial cash flow crisis is directly attributed to the federal government policy to limit agricultural support payments to larger producers. For example, the 2008 federal AgriStability program is expected to provide support payments of at least $30 per hog sold to most producers. Due to the limit of support to larger producers as a result of the caps, Stomp Pork Farms would receive less than $6 per pig sold. The result of this federal policy is that larger producers, including Stomp Pork Farms, which represent 60% of Saskatchewan's pork production, are left with little or no support.

The pork industry's larger operators impact the livelihoods of thousands of rural people and pay millions in uncapped taxes in the province every year. They utilize millions of bushels of locally grown feed grains and support hundreds of complementary businesses across Saskatchewan and western Canada. In addition, millions of dollars are returned to Canada in foreign exchange due to world-wide exports of high quality pork products.

The true extent of the financial loss to the province and the country are almost incalculable should the larger operators be forced to cease operations. These producers are the backbone of the Canadian pork industry but are continually denied the same financial consideration that is available to smaller farming operations.

Due to flawed government policy that subjectively limits protection to larger operators, extremely efficient producers are being forced out of business. Our industry's repeated requests to have the caps removed from the current suite of farm support programs have been ignored.

On March 14, cross-commodity letters of support for the removal of program caps were submitted to federal Agriculture Minister Gerry Ritz, James Bezan, Chairman of the Standing Committee on Agriculture and Saskatchewan Agriculture Minister Bob Bjornerud. The letters were submitted by Big Sky Farms, Olymel S.E.C./L.P., Federation des producteurs de porcs du Quebec, Saskatchewan Association of Rural Municipalities, Saskatchewan Cattle Feeders Association, Saskatchewan Pork Development Board, Saskatchewan Stockgrowers Association, and SPI Marketing Group.

Additionally, the Canadian Pork Council and its provincial pork organizations have implored the federal and provincial governments to make these necessary changes to ensure farm support programs are fair and equitable to all producers. To date we have had no response.

The time for waiting for the industry to heal itself is over. As evidenced by the second major bankruptcy case in the hog industry in western Canada this week, the signs are very evident the industry is at a breaking point. If the federal government continues to choose to wait and watch, there will be no livestock industry left.

Clearly, Minister Ritz needs to let producers know if the federal government intends to do something meaningful to change the cap level. A non-response again is unacceptable, as producers have life-altering decisions to make. No response clearly sends the message that the federal government is no longer interested in sustaining Canada's livestock sector.

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For further information contact:

Neil Ketilson, General Manager
Saskatchewan Pork Development Board
Tel: (306) 244-7752

Joe Kleinsasser, Chairman
Saskatchewan Pork Development Board
Tel: (306) 261-4725

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MEDIA RELEASE: January 25, 2008
This is beyond funny incompetence. This is gross incompetence that causes serious hurt. Over the past week, Saskatchewan pork producers individually received communication from the federal CAIS administration indicating that most would be receiving a sizeable payment under the recently announced Targeted Advance Payment (TAP) Program for hogs. Within days of receiving this communication, nearly all producers were subsequently informed they would be receiving a substantially reduced payment, and in many cases "zero" and that the previously calculated payments were incorrect.

The Saskatchewan Pork Development Board is calling for federal Agriculture Minister Gerry Ritz to take responsibility for the incompetence of his staff within the Farm Income Programs Directorate. We are also requesting that the Government of Saskatchewan take immediate steps to assume complete administrative control of the CAIS program for Saskatchewan producers.

Saskatchewan's pork producers have completely lost confidence in the federal CAIS Administration's ability to deliver program benefits in a timely, accurate and transparent manner. Producers have built up significant reference margins over the years, and paid substantial program fees to ensure they were protected from drastic margin declines.

The producers of Saskatchewan demand a public apology, detailed explanation of the Targeted Advance Payment calculation and why these errors were made. Although this was a serious error, the fact remains that program technicalities such as 'non-calendar year ends', and 'program caps' are denying timely access to assistance for producers who are running out of time and money. Due to the failure of the 2007 Targeted Advance to deliver assistance to producers, we are requesting that 2008 interim application be made immediately available, and that program payment caps, that deny assistance to over half of Saskatchewan's industry, be immediately removed.

The CAIS administration has fumbled the ball. When are we going to get some accountability? In our darkest hour, current business risk management programs are offering no protection, and have actually cost producers money. During this stressful time when individuals are experiencing extreme financial pressure, to erroneously be promised cash payments is nothing less than emotional torture.

For further information contact:

Joe Kleinsasser, Chairman
Tel: (306) 261-4725

Neil Ketilson, General Manager
Tel: (306) 244-7752

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MEDIA RELEASE, December 21, 2007
Saskatchewan's hog producers are applauding the Government of Saskatchewan's announcement today to provide support for the hog industry that has come in the form of a Short-Term Loan program. This will provide immediate financial assistance for cash strapped producers who have been facing unprecedented financial pressure over the past few months.

A significant rise in Canadian currency resulting in lower commodity prices, along with increased costs for feed grains and transportation, have combined to create an enormous financial burden for producers during the last quarter of 2007. While the livestock sector may typically face price challenges and cost of production fluctuations, the combination of all these factors at the same time has not been seen before.

The Saskatchewan Pork Development Board acknowledges the efforts of Agriculture Minister Bob Bjornerud, and recognizes our new provincial government was given an enormous challenge to consider our request for immediate industry support during their transition period. We are extremely grateful Cabinet was able to review our request and provide a favourable response before the end of the year. This signifies to us the provincial government's commitment to the agricultural sector.

While the federal government has farm support programs in place, the turn-around time for these programs is woefully inadequate relative to the urgent needs of the province's livestock sector. The Government of Saskatchewan is working with the federal government to implement a targeted advance under the AgriStability program that would be of benefit to producers by hastening the flow of federal CAIS funds to Saskatchewan producers.

Sask Pork Chairman, Joe Kleinsasser is extremely pleased with the government's announcement adding that "this loan provides a necessary bridge over these troubled waters until our industry returns to profitability."

Saskatchewan hog producers raise 2.4 million hogs annually contributing $312 million in gross sales to the province's economy in 2006.

For more information, view the Government of Saskatchewan Press Release and the Short-Term Hog Loan Backgrounder.

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