August 17, 2009
On August 15th the Government of Canada announced a support and restructuring program for Canada's troubled hog industry. The $92 million announcement is made up of three components including:
- The creation of a government backed Hog Industry Loan Loss Reserve Fund to support private sector loans to "viable" hog producers. Through the fund the Government of Canada will share loan loss risk with private sector financial institutions - including credit unions. This aspect of the program is still in the "design phase" and is the subject of negotiations between the Government of Canada, the banking sector and credit unions (see below).
- The creation of a $17 million "International Pork Marketing Fund" that will assist Canada Pork International to help develop markets, capture greater value from current export markets and help address pork export losses resulting from trade restrictions.
- The establishment of a $75 million Hog Industry Transition Program to help producers seeking to transition out of the industry. Hog producers agreeing to keep their barns out of production for a period of at least three years would be eligible to participate in the program and receive a negotiated payout.
Credit Union Central of Canada, the Canadian Bankers Association and the Government of Canada are currently discussing the program parameters that will govern the Hog Industry Loan Loss Reserve Fund. Canadian Central is supported in these discussions by members of Credit Union Central of Canada's national Agriculture Sub-Committee of the Legislative Affairs Committee. Key issues, including the extent of the government guarantee associated with the Loan Loss Program; need to be finalized before the program is rolled-out.
Further information about the restructuring plan can be found here:
http://www.agr.gc.ca/cb/index_e.php?s1=n&s2=2009&page=n90815b
Please contact Robert Martin, Director of Research, Credit Union Central of Canada with any questions you may have: martinr@cucentral.com