Agriculture reacts: Government support "disappointing" and falls well short of industry ask

The federal government has released its second round of support aimed specifically at the agriculture industry, and reaction to the $252 million (split between three initiatives) has been swift and consistent: it’s not enough.

Below is industry reaction from several commodity organizations, including those to whom a portion of the targeted funds will flow.

The Canadian Pork Council
Industry experts have estimated that pork producers will lose $675 million in 2020. For weeks now, producers have been expressing the critical need for support. We specifically asked for $20/hog to feed the animals, keep the lights on, and ensure consumers have ready access to wholesome Canadian pork products.

“For the past five years, we have heard from our government that they want to help us to grow our sector, yet when our house is burning, they are offering us a glass of water to save it.” — Rick Bergmann, Canadian Pork Council chair.

Producers have been deeply affected by the sharp decline in hog prices and the reduced capacity of processing facilities to accept their animals. “We want to be able to continue producing food. Providing us with band-aid solutions will only relieve the immediate pressure, but doesn’t solve producers’ liquidity problem” — René Roy, 1st vice-chair.

The Canadian Cattlemen’s Association
The Canadian Cattlemen’s Association (CCA) is deeply disappointed that this initial announcement falls well short of the comprehensive approach needed to help Canadian beef farm families manage through the COVID-19 crisis. Only one of CCA’s three immediate recommendations to address the beef industry’s challenges was partially funded in today’s announcement. The CCA will continue to urgently advocate for the comprehensive approach needed to support Canadian beef producers and the long-term viability of Canada’s food system. An unprecedented crisis requires unprecedented responses.

The CCA acknowledges the important investment in processing facilities. “Addressing the current challenges at packing facilities is fundamental to our long-term success in recovering from this crisis. Investments that will support worker safety and business continuity at processing facilities are essential, and we applaud this important investment. But until such capacity can be brought online, Canadian beef producers will continue to carry the financial burden of feeding and caring for animals that should have been harvested already.”— Bob Lowe, CCA president

Reductions in processing capacity have resulted in a backlog of 100,000 head of cattle that are ready for market with nowhere to be processed. An additional 6000-9000 head of cattle per day is being added to the current accumulation due to continued reductions at processing facilities. These 100,000 head of cattle alone cost $400,000 a day to feed and care for, and the value of a market-ready animal has dropped over $500 per head since the start of COVID-19. The CCA estimates that left unaddressed, the Canadian beef industry will lose half a billion dollars by June on market-ready cattle alone.

The CCA recommended a set-aside program that would help producers pay for the unexpected cost of feeding and sheltering cattle beyond their targeted harvest dates. This announcement provides a fraction of already incurred and anticipated expenses.

The Canadian Federation of Agriculture
“Farmers are making decisions today on how confident they should be investing in further food production this year. They are making decisions right now that will have a direct impact on the variety and cost of domestic food availability for everyday Canadians. With such huge uncertainty in our sector and lack of a firm financial backstop, in essence, we are asking our farmers to put themselves and their farms at risk to grow food for Canada. Many farmers are facing the reality that these risks are too great, and are having to modify their food production plans.

“As a country we cannot allow this to happen.” — Mary Robinson, president of the Canadian Federation of Agriculture.

CFA worries that the government’s position on using existing Business Risk Management programs, such as AgriStability, before rolling out additional funds will result in support arriving too late to make a substantial and positive impact on domestic food security.

The National Cattle Feeders’ Association
The National Cattle Feeders’ Association (NCFA) is encouraged to see the Government of Canada recognize the agriculture industry as essential. In the face of this crisis, our industry continues to work hard to ensure Canadians have a safe and reliable food supply.

Due to the impact COVID-19 has had on our processing sector, the beef industry supply chain is backed up to the farm gate approximately 100,000 animals. These animals are costing producers approximately $400,000 per day to maintain while their value fell from $250 million pre-COVID to approximately $165 million currently, based on the fed cash price. Collectively, our beef industry has been requesting a set-aside program to assist beef producers in maintaining animals at the farm that cannot be processed for the food industry.

“The $50 million announced this morning for the Federal portion of the set-aside program is not enough to have an impact on this backlog or the additional costs to producers,” says Michel Daigle, NCFA chair.

The NCFA also requested changes to the Agri-Stability program such as: Eliminate the $3 million payment cap; increase the trigger from 70% to 85% for 2019-20 and remainder of the CAP Partnership Agreement; invoke the “late participation clause” to help producers access needed support; remove “reference margin limiting” for meaningful and longer-term support; and, process claims more quickly and allow for interim payments.

The announcement did not cover any of these requests, instead provided an interim payment increase from 50 per cent to 75 per cent and an extension of the deadline to July 3, 2020.

Mushrooms Canada
Mushroom farmers will be looking to access the $50 million for oversupply for the pandemic 16 weeks that are stipulated. And we are looking for clarification to access the $77 million for physical distancing and protective equipment food processing COVID-19 costs that mushroom farms have already put in place protecting our farm and on-farm food processing and packaging workforce.

“Oversupply has been a massive problem due to restaurants being closed. We also need funding for physical distancing and protective equipment. We ask the Government of Canada to help us protect our workforce by including us in the current protective equipment announcement. Our mushroom farms have done things like leasing and purchase of extra housing and Plexiglas in the workplace to prevent the spread of COVID-19. We think all farmers should have access to a fair reimbursement program so that we can move forward confidently to implement lessons learned from each other and the meat processing sector.” — Ryan Koeslag, executive vice president of Mushrooms Canada

Grain Farmers of Ontario

“Grain farmers in Ontario are facing an unprecedented $550 million in lost revenues. Over 67 percent of our farmer-members are worried about their farms‘ ability to survive this crisis and its aftermath. The federal government has ’targeted‘ groups without understanding the full picture. Our Prime Minister and his government are asking grain farmers to bear the costs of everyone having enough to eat.”— Markus Haerle, chair of Grain Farmers of Ontario

Ontario grain farmers have recommended reasonable, realistic changes to the current slate of support programs for farms that will offer grain farmers the security to invest time and money into the farm businesses that lay the foundation for Canada‘s food supply system.

 

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