Good afternoon everyone. I am pleased to be here as the representative of the Fédération des producteurs de porcs du Québec. Thank you and welcome to our beautiful region of Montmagny—Côte-du-Sud—Chaudière—Appalaches.
Created in 1966, the Fédération des producteurs de porcs du Québec is an agricultural association set up under the Professional Syndicates Act. It is affiliated with the Union des producteurs agricoles du Québec and the Canadian Pork Council. Composed of 12 regional associations, the federation represents 4,111 hog farmers throughout Quebec.
Its mission is to obtain better social, technical and economic conditions for producers through the implementation of strategies designed to preserve and develop Quebec hog operations. It is dedicated primarily to marketing all pork products in Quebec. To this end, it is the sole sales and negotiating agent for all of Quebec hog producers. The federation also administers promotional and research funds and elaborates developmental hog production programs.
Risk management is an integral part of the daily lives of hog producers. Health hazards and market-related risks are the main risks that hog producers must face. The Fédération des producteurs de porcs du Québec believes that the federal government must do more to support hog producers in the management of the numerous, unforeseen and unavoidable risks that affect this sector.
I will now provide you with the federation's comments on the range of business risk management programs that the federal government offers.
Our first comment pertains to the Canadian Agricultural Income Stabilization program, or the CAIS. Quebec hog producers have extensively tested the CAIS program's effectiveness over the past two years. Indeed, the producers have been hard hit by the circovirus and has sustained unprecedented losses. In the absence of production insurance, the CAIS program had to compensate producers for such losses. It goes without saying that producers expected a great deal from the program, which was supposed to specifically compensate for difficult years based on a farming enterprise's past performance.
Producers have indeed been disappointed since the majority of farming enterprises have not obtained the anticipated level of compensation, which has undermined them financially. Consequently, the Ministère de l'agriculture, des pêcheries et des alimentations du Québec launched a $15.2 million ad hoc program aimed at overcoming these shortcomings. Moreover, it is deplorable that the federal government is unwilling to share de facto the costs of such programs when the province announces and funds them. In light of its experience, the Fédération des producteurs de porcs du Québec is requesting certain changes to the CAIS program to ensure that it fulfils its initial objective and adequately compensates producers.
I will now discuss interference regarding diversified farm operations. Farming operations that engage in several types of production are often at a disadvantage compared to those engaged in a single type of production with respect to the amount of disaster relief they obtain. Indeed, it has been observed that the losses sustained from one type of production are often offset by gains achieved in the second type of production. In the event of a disaster, such as the health crisis that hog producers faced between 2004 and 2006, it is unacceptable that the CAIS program does not offer the same level of coverage to two farming enterprises that sustain similar losses.
To resolve the interference problem with respect to diversified farm operations, the Fédération des producteurs de porcs du Québec is recommending the following solutions that should be implemented in the event of a disaster.
In the short term, all cases involving hog producers who were victims of a disaster in 2004, 2005 and 2006 should be re-examined and eligible incomes and expenses pertaining to hog productions should be isolated to calculate compensation under the CAIS program.
On an ongoing basis, the federal government should approach the provinces to ensure that companion programs are considered by production sector when a disaster strikes a farming enterprise.
The CAIS program must also be adjusted to prevent an erosion of the reference margin. Indeed, the existing program application rules combined with the absence of production insurance in the hog sector reduce the reference margin of enterprises over time. The sector cannot wait any longer for the establishment of a production insurance program, which is slow in coming, to resolve this problem. The federal government must propose solutions to support the reference margin of producers who experience a disaster, in the absence of a production insurance program.
The Fédération des producteurs de porcs du Québec believes that other facets of the CAIS program must also be reviewed and enhanced. Among the key points, mention should be made of foreseeability, response time and the administrative burden that the program imposes. A program that is as hard to foresee as the CAIS program becomes in itself a risk factor that is added to the numerous factors that the producers are already facing. As for the response time and the administrative burden, a majority of producers from all sectors criticize them and the federal government must find a way to reduce them.
Producers also find it hard to accept the principle of shared cost programs when such programs cover disasters or uncontrollable risks. When a disaster has already undermined a farming enterprise's financial position, it is hard to assume part of the cost of a program that often covers only a portion of the losses sustained.
With the launching of the Agriculture Policy Framework, promises were made that production insurance would be extended to other commodities, including livestock. Despite the industry and government's efforts, we are still far from implementing production insurance suitable for livestock.
Given the absence of production insurance and the inadequate coverage offered by the CAIS program in the event of disease, many hog farms have been undermined financially or have ceased operation. The lack of production insurance hits producers in two ways. First, production losses are not fully covered. Second, the CAIS program reference margin is being eroded.
It is essential that the federal government promote, in the provinces, the development of a production insurance program to restore fairness in relation to other commodities that have benefited for several years from such insurance. Moreover, the federal government should establish the framework governing factors such as the premiums payable and insurable diseases. It is essential that the premium that producers pay to participate in this program is affordable. In addition, the insurable diseases must not be confined to those in which the herds are disease-free, but must include those diseases that are serologically present, but whose clinical signs are under control.
Do I still have some time left?