Good afternoon, everyone. It's a pleasure to be here today to speak with you about business risk management. I'm Clare Schlegel, president of the Canadian Pork Council, and l farm in southwestern Ontario, halfway between Buffalo and Detroit—there's no humour here. With me is Stephen Moffett, and Stephen farms in New Brunswick.
The Canadian hog sector is a large segment of Canadian agriculture, with production occurring in every province. In 2006, 30.8 million hogs were produced in Canada. Approximately 8.5 million of these hogs were exported live to the U.S., either as weaner pigs or market hogs. Of the remaining 22.3 million hogs processed in Canada, 50% of the pork was exported to 88 countries around the world.
While our success in export markets has allowed the sector to grow, it also places very large demands on producers to meet the expectations of customers in both the domestic and international marketplaces. Risk management, therefore, is part of the everyday decisions made by producers. Currency fluctuations, interest rate changes, input costs and availability, management challenges, and increasingly sophisticated customer demands are all big risks. The vast majority of these risks are borne directly by producers.
The question facing us today is where governments can play a role in helping to mitigate risks. We have read the discussion paper developed to help frame the debate around business risk management, as well as the next generation of agriculture and agrifood policy framework. We support many of the concepts within the paper, and we will touch on them below, beginning with the design principles.
The first principle outlined in the paper and identified as the most basic principle is to ensure that funds are used in an equitable manner, treating producers across commodities and regions equitably.
The CPC is fully supportive of this principle and asks governments to focus on this. It is clear that the current suite of programs does not meet this principle, particularly where programs originally intended for crop producers are not expanded to livestock production. We will speak more on this in terms of production insurance.
We support the principle that government funding should focus on mitigating the negative impacts of uncontrollable and unforeseen events, and we support that programming must conform to international trade obligations and minimize the threat of trade actions. The hog sector is no stranger to trade challenges, as you well know, having experienced countervail and anti-dumping actions. It is well aware of the costs of such actions in direct expenses and, more importantly, of the damage that arises in a sector as a result of the uncertainty created.
The design principle that looks for producer involvement in sharing the program costs is, as in many cases, unnecessary. As noted above, the majority of risks facing hog producers are borne directly by producers. Producers already assume considerable risk in production, and sharing in the program cost is simply an added expense.
Regarding the new suite of business risk management programs, we have the following comments to make—and I'll turn it to Stephen at this point.