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Government of Canada improves support to farmers

Under proposed amendments to the Agricultural Marketing Products Act, (AMPA), the Government of Canada is resolving to deliver 'real help' to struggling farm families, as they adjust to new market realities.


February 26, 2008
By Government of Canada

February 25, 2008

OTTAWA  BThe Government of Canada is working hard to deliver real help for struggling farm families who are weathering short-term storms and adjusting to new market realities. The Honourable Gerry Ritz, Minister of Agriculture and Agri-food and Minister for the Canadian Wheat Board, today introduced proposed amendments to the Agricultural Marketing Products Act (AMPA) which will give Canadian producers better access to cash advances as they make important business decisions.


"This Government has worked closely with producer groups to specifically target help to sectors facing severe challenges," said Minister Ritz. "Right now Canadian livestock producers are struggling with a high dollar and high production costs, but these kinds of short-term struggles can strike any agricultural sector."


"When Canadian farm families face these downturns, this Government is backing them up with solid support to get them back on their feet to compete in the global
marketplace."


Since coming to office, this Government has already delivered flexible and bankable programs that will provide up to $1.5 billion in funding to livestock producers in late 2007 and 2008. Proposed changes to the Advance Payments Program (APP) through the amendments to AMPA will make sure Canadian producers can access up to $400,000 in repayable advances.


The proposed amendments to the APP will provide easier access to immediate cash flow by:

Removing the requirement for livestock producers to use a Business Risk Management program such as AgriStability as security for a cash advance and allowing producers to use inventory as security. This brings the treatment of livestock more in line with other produced commodities.


Adding "severe economic hardship" as a condition to offer emergency advances, on the recommendation of the Minister of Agriculture and Agri-Food and the Minister of Finance.


Revising the security requirements for emergency advances and increasing the emergency advance available to producers from a maximum of $25,000 to $400,000 in conditions of severe economic hardship.

Taken together, program improvements made in December and proposed changes to AMPA represent significant changes to advance payments. Producers will have quicker and easier access to cash advances and if all producers take advantage of the improved program, an estimated $3.3 billion in advance payments will be available. The federal government has worked with industry in developing the changes to AMPA.


"This is much needed help," said Clare Schlegel, President of the Canadian Pork Council and a hog producer in Ontario. "Hog farmers are struggling, facing the worst crisis in their farming history. What has been announced today will provide the breathing room that we have been asking for."


"We welcome this change as it will provide much needed cash flow to producers at a time when the current crisis across the country has reached a critical point," said Hugh Lynch-Staunton, President of the Canadian Cattlemen’s Association (CCA). "This improvement to the Advance Payments Program is consistent with a CCA recommendation and will improve Canadian producers' ability to deal with their liquidity crisis. It is a step in the process, and we will continue to work with the government to implement further improvements in our business risk management programs, the regulatory environment, and market access to improve the competitive environment Canadian beef producers are working in."


The Government is also announcing a new $50 million initiative with the Canadian Pork Council to deliver a sow cull program that will help restructure the industry to bring it in line with market realities.


In addition, over the next two weeks, the Government will work with industry and review meat inspection user fees to assess their impact on competitiveness of the sector.


As well, the Government of Canada is working to reduce costs and increase competitiveness under Canada’s enhanced feed ban. This complements the federal government’s commitment of $80 million to help the industry adjust to new feed standards.


To get advance payments to producers quickly, the collaboration of all political parties will be required to agree to quick passage of AMPA amendments.


The Government will continue to work with the livestock industry to find ways of helping industry position itself to be competitive in the long term. These measures include enhancing market access efforts in addition to reducing the regulatory burden and examining means to reduce the cost of the feed ban implementation.