Thank you, Mr. Chairman.
Good afternoon. As mentioned, my name is Rick Bergmann. I'm a hog producer from Steinbach, Manitoba, and the vice-chair of the Canadian Pork Council.
First of all, I would like to thank the members of the House of Commons Standing Committee on Agriculture and Agri-Food for the invitation to appear before you this afternoon to discuss Bill C-18.
The CPC serves as a national voice for hog producers in Canada. We're a federation of non-provincial pork industry associations. Our purpose is to play a leadership role in achieving and maintaining a dynamic and prosperous pork sector. As you know, that's not an easy job.
We are pleased that the common theme for the proposed changes in this bill has the potential of increasing producer access to programs and lowering costs. I'll use the next few minutes to comment on behalf of pork producers across the country. For the record, today I will not be talking about temporary foreign workers.
Hog production is a huge economic engine in Canada. We are a sector that exports more than two-thirds of the hogs produced in Canada as either live or pork products. Exports help the Canadian hog and pork industry to grow. They benefit all of us. However, exports, or the potential of an export market, are worthless if Canada does not have producers to supply the product. Keeping farm costs under control and eliminating red tape is important for us and for all our members.
Our industry has faced serious challenges to our ability to compete in the world market in the recent past, including country of origin labelling, a strong Canadian dollar, historically high grain prices, and the world economic slowdown. However, we have managed to come through all this with a smaller but highly competitive hog sector, and we must not lose sight of the Canadian hog industry's long-term interests. The world economy will continue to evolve. We cannot afford to overlook or suspend any efforts that can improve our market access or place our industry at a competitive disadvantage.
The pork industry has turned its corner over the last year and due to lower feed costs and stable hog prices, we're enjoying a better year. CPC has recently commissioned a paper on the financial situation faced by the hog and pork sector here in Canada. The paper highlighted a few things. Current profits have not completely rebuilt the industry equity lost during the previous years, so producers are feverishly taking the money they have been able to make this year and primarily putting it in the big hole behind them to get that fixed so they can move on. We're pleased that can happen.
Current profits are linked to the production impact of the PED virus in the United States. That virus is also here in Canada as well, to a lesser extent. Prices could come under strong downward pressure in 2016 due to capacity limitations, so we need to be able to provide strong export markets for the products we produce here in Canada. The main point is that commodity markets remain inherently risky, and hogs have demonstrated a great deal of price and margin volatility due to hog supplies, global demand, cost of grains, and current fluctuations. The industry as well as its financiers will remain vigilant and cautious as it recovers from the severe trauma of the past years. We have lost many producers over the last five years.
Canadian hog producers see value in the advance payments program and view the changes to the Agricultural Marketing Programs Act as an improvement. Steps that can reduce the administrative burden and cut costs for participating can make a difference, and we encourage that to continue. The availability of the program assisted many producers with their cashflow during a very difficult period in the industry. While many of the proposed changes are focused on the administrative part of the program, we encourage a review of the loan limits in this regard. The maximum limit currently of $400,000, with $100,000 interest-free, should be raised to reflect more of the general farm operation sizes, particularly in the hog industry. At one time these numbers were more meaningful than what they are today, so they need to be reviewed and brought in line to where the industry is.
The repercussion from several years of difficulty in the hog sector is the availability of credit. APP will help, but it will not help with the construction or improvement of buildings. The CPC is currently examining the Canadian Agricultural Loans Act and the CALA program to determine how the program could be improved in order to better meet the objective of supporting the renewal of the hog sector in Canada. Building structures are aging, and the industry is in need of significant reinvestment to ensure continued efficiencies. A modified CALA loan program would be extremely helpful in this regard.
Being from Manitoba, we're very sensitive and our provincial government is very sensitive to phosphorus. Phosphorus comes in many forms, but the Feeds Act currently states that there's a minimum-maximum level of phosphorus in the feeds that would need to be consumed by these animals. We believe it's time for that act to be reviewed and to bring it to an area that would be more applicable and acceptable for producers around the world.
In conclusion, we are recognized around the world for our animal husbandry practices and the quality and safety of the pork we raise. People want what we have. We need to continue to build on that momentum.
I thank you for your time.