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Video Interview: Ernie Hardeman MPP Opinions on Pork, Beef Price Risk Management Program

Shaun Haney from Real Agriculture discusses the Beef and Pork Sector Price Risk Management Program situation in Ontario and compared it to Alberta programs.



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Permalink Reply by Joe Dales on December 3, 2010 at 7:25am
BEEF AND PORK FARMERS PARTNER TO SUPPORT RMP

From a Release - GUELPH – Today marks the official launch of Ontario Cattlemen’s Association and Ontario Pork’s joint campaign in support of a risk management program (RMP) for the beef and pork industries. Beef and pork farmers are striving to educate politicians and enlist the Provincial and Federal governments to partner with them in establishing insurance programs similar to the successful pilot program recently implemented by the Ontario Government for the Grains and Oilseeds industry.

Ontario’s beef and pork industries are experiencing a severe downturn. Ontario’s beef cow herd has declined 18.4% since the beginning of 2003 while sow herd has declined over 20% since 2007. This downturn is the result of several factors including BSE, H1N1, and a high Canadian dollar, bringing increased competition from imports. With multiple economic threats occurring over an extended period of time, the current AgriStability program alone is not enough to sustain these industries.

“We understand that a solution is needed now and for the future. Therefore farm groups from across the province are working together to discuss the best way to move forward,” says Curtis Royal, President, Ontario Cattlemen’s Association. “We have undertaken unprecedented consultations with our members and the broader farming community to shape our specific insurance programs, and it is clear that creating this plan is our members’ number one priority.”

Part of the province’s broader farming community, Ontario’s beef and pork farmers are ready to partner with the provincial and federal governments now to establish these insurance programs that would protect against market fluctuations and allow all partners to share and limit risk.

The proposed insurance program would see local Ontario farmers in the beef and pork industries pay premiums to the government representing 30% of the long-term cost of the insurance program on a voluntary basis. We are asking governments to participate according to the traditional 60/40 federal/provincial split and for the province to act immediately to kick start and fund their share of the program.

“Not only would the program offset the difference between the current market price and the average long-term cost of production, it would also eliminate the need for ad hoc government support for both the beef and pork industries in the future,” says Wilma Jeffray, Chair, Ontario Pork. “We are encouraging many of our members to meet with their local MPs and MPPs and become ambassadors for these programs in their communities. In addition, members and the general public can visit the campaign website to learn more about the proposed insurance programs and to continue to show their support for Ontario’s local beef and pork farmers and a strong local food supply.”

The immediate focus of the joint campaign is to achieve a commitment from both the federal and provincial governments.

In September 2010, Ontario Pork and Ontario Cattlemen’s Association presented their proposed insurance programs to Ontario’s Minister of Agriculture for consideration. By partnering with Ontario’s local farmers, the provincial and federal governments will help sustain local food production and strengthen the rural economy.

Ontario Pork and Ontario Cattlemen’s Association have been working with the Ontario Agricultural Sustainability Coalition (OASC) for the past year and continue to do so. In addition, the two associations have been working together for the past three months on finalizing their plans and are now prepared to move forward.
Permalink Reply by John Schwartzentruber on December 3, 2010 at 12:19pm
If I am not mistaken, it was stated at the Farmers Matter meeting that when the APP monies come fully due in 2012, there is an anticipated default rate of something like 80%.

Please feel free to correct that figure if I am mistaken.

If, indeed, that figure is correct, my question is - perhaps Curtis Royal could make clear for us how a Risk Management Program will come close to helping alleviate the shortfall faced by many beef producers?

Will the repayment date just keep on getting pushed back? If so, how is that fair to those who did not take APP funds and simply financed their operations themselves?

The point is, without the BSE mediation request cash settlement asked for by the beef producers, there is not much point in talking about RMP for many producers.

The OCA has failed us. They are trying to win a battle while losing the war.
Permalink Reply by Roger Dorne on December 6, 2010 at 3:29am
You are mistaken. The 80% of farmers that will be in default was in reference to Wayne Easter's home province of PEI. What does the APP have to do with an RMP program? If I remember correctly, Mr. Royal stated that OCA cannot support a class action suit which aims to sue the very government OCA must work with on a regular basis. It is unfortunate that many producers will default on their payments, but a Risk Management Program aims to reduce risk and provide some stability for the volatility farmers are exposed to on a regular basis. Managing risk and lump-sum loans are two different issues entirely.
Permalink Reply by John Schwartzentruber on December 6, 2010 at 5:18am
Thank you for clarifying the context of that figure for us. However, I fail to see how it is any more acceptable to see such a high percentage of producers in potential default just because it is only in PEI. Furthermore, how much better is the situation in the rest of the provinces that have not had some form of gov't intervention? I guess we will find out soon enough.

If the government is concerned about the repayment of the APP loans, then they should do the right thing and acknowledge that it was their own mismanagement of the BSE situation that caused the financial hardship that beef producers are now experiencing. The money that the mediation request is asking for will go a long way toward addressing the avoidable injury suffered by the beef producers in particular.

On another note, it will be interesting to find out whether out not Mr. Royal et al will accept their share of the payout should the requested mediator find in favor of the cattle producers.

And as to your question about the correlation between APP and RMP - I am saying that RMP will do little good for the many producers who will not survive having to come up with the funds to repay their APP funds. So while RMP and APP are unrelated on the surface level, they are most certainly much more interdependent than you acknowledge.

Bottom line on RMP is this - it does nothing to address the root of the problems in the red meat industry - that of grossly inadequate returns from the market place. If anything, I would postulate that the unintended, long-term outcome of RMP will be stable but low market prices that will force constant dependency on the program. More bailing buckets would not have saved the Titanic.

Therefore, unless we can find a way to stimulate and sustain a competitive marketplace for red meats, we will never again see meat values that are responsive and reflective of today's true cost of production and thus we will remain dependent on government programs to stay in business. But at least the packers and consumers will be happy...
Permalink Reply by That Guy on December 6, 2010 at 3:27pm
Yes becuase the OCA history of sucking up to government is such a strong and compelling one - not



Roger Dorne said:
You are mistaken. The 80% of farmers that will be in default was in reference to Wayne Easter's home province of PEI. What does the APP have to do with an RMP program? If I remember correctly, Mr. Royal stated that OCA cannot support a class action suit which aims to sue the very government OCA must work with on a regular basis. It is unfortunate that many producers will default on their payments, but a Risk Management Program aims to reduce risk and provide some stability for the volatility farmers are exposed to on a regular basis. Managing risk and lump-sum loans are two different issues entirely.
Permalink Reply by Joe Dales on December 9, 2010 at 9:22am
Ontario Veal Association Presents Program Design for

Risk Management Program to Minister of Agriculture



Representatives from the Ontario Veal Association met with Minister Mitchell last week to present their program design for a risk management program (RMP) for the veal sector.

“The OVA was pleased to have the opportunity to meet with Minister Mitchell to discuss the needs of the veal sector” stated OVA President Judy Dirksen. “The Minister was very receptive to our proposal and she understands that there is a real need in the livestock sector for business risk management programming that actually works for our industry”.

The OVA’s proposal would see veal producers paying premiums representing 30% of the cost of the insurance program on a voluntary basis. The program would offset the difference between current market prices and the average previous year’s cost of production. The OVA is asking both the federal and provincial government to support the program in the traditional 60/40 split.

“We have asked Minister Mitchell to start the program off by committing the province’s share of 40% immediately” suggested Dirksen. This is the same message that both the Ontario Cattlemen’s Association and Ontario Pork have also communicated and it is supported by the Ontario Agricultural Sustainability Coalition (OASC).

“We now have veal, beef and pork proposals on the table, in addition to the other major commodities, with the Minister and now it is time to get the funding in place. The need could not be greater in the livestock sector for a risk management program that will be predictable and bankable for producers” stated Dirksen.

The OVA, representing Ontario’s grain-fed and milk-fed veal producers, is an active member of OASC, along with other non-supply managed commodity organizations.
Permalink Reply by Roadrunner on December 17, 2010 at 1:33pm

I think part of the problem is that there are too many people asking for different things and it is easy for one of the weak links to slow the whole process down.  At least there seems to be some coordination in Ontario but is it enough.

Feds need all the provinces....CFA, OFA, OCA, Ontario Pork....no wonder the cash does not flow.

It will be easy for the Federal government to plead poverty now with the deficit.

 

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