WINNIPEG, Manitoba (Reuters) - Canadian cattle and hog farmers, struggling with high feed costs and low prices, will have access to a total of C$3.8 billion ($3.73 billion) in loans and aid early in 2008, Agriculture Minister Gerry Ritz said on Friday.
Federal and provincial governments will provide C$2.3 billion in secured loan guarantees to the livestock sector, including C$1 billion in new credit, Ritz told reporters.
Loans will be capped at C$400,000 per producer, and the first C$100,000 will be interest-free, he said.
In addition, governments will accelerate access to C$1.5 billion in support programs, Ritz said.
Ritz said the programs will help livestock farmers weather poor returns brought on by record grain prices, poor meat prices, and the surging Canadian dollar, which has hurt the export value of meat and livestock.
“We’ve seen these peaks and valleys before; they’ve struggled through. It’s a matter of the government giving them the help at the time,” he said.
Ritz said the aid, which will be delivered through existing government programs, would comply with Canada’s trade agreements, and he said he discussed them on Thursday with Chuck Conner, the acting U.S. agriculture secretary.
Livestock groups have been lobbying governments for weeks for help to cover mounting losses.
“At first blush, it sounds like the kind of things we’ve been asking for, and we’re very happy that the federal government will step up to the plate,” said Hugh Staunton-Lynch, president of the Canadian Cattlemen’s Association.
Ritz projected the programs would give a 400-head cow-calf farmer aid payments of C$38,500 and loans of up to C$116,000. A 500-sow hog farmer could receive C$185,500 in aid payments and loans up to C$250,000, he said.
Ritz said governments were not able to comply with a request from hog farmers for C$1.5 billion in unsecured loans.
“There’s really no way to do that at any government level. We have little things called treasury boards and auditors general that take a dim view, and of course (unsecured loans) are completely trade-challengeable,” Ritz said.
The Canadian Pork Council was slated to meet to discuss the aid announcement on Monday. “We suspect it’s just a reannouncement of current programs,” said Clare Schlegel, the group’s president, adding he hoped the government would reconsider the request for a bigger loans package.
“Our farmers are in real distress here. It’s been such a severe situation,” Schlegel said.
Reporting by Roberta Rampton; Editing by Rob Wilson