Heaven help the family that depends on a farmer for support. Heaven help the nation that doesn't have that farmer to support it.
Mr. Chairperson and committee members, my name is Andrew Frew, and I'm here as an individual.
I'm a hog producer. I farm with family in Durham region. We raise 325 sows, farrow to finish. I have six family members who rely on our farm as their sole income.
This document refers to a Rod de Wolde, who helped me put this together. Through my not understanding the process, I didn't properly have him entered to help me today, but he is documented here for all the work he has helped with. He is a genetics breeder, supplying breeding stock to other hog producers. He also relies on the hog industry as his sole source of income.
The crisis in the hog industry is well documented. I'll highlight just a few things: the rising Canadian dollar, increasing feed prices, country-of-origin labelling, economic downturn, and finally the H1N1 virus. These problems existed long before the current recession and are no fault of the producers.
We believe the industry is at a tipping point. There are many secondary industries that rely on the hog industry. If our industry fails, these industries will fail also, and this will have a greater effect on the overall economy.
We compete in global markets in the hog industry. There are safety net programs within the government, but they have become ineffective because of this perfect storm that has hit us. As grassroots producers, we believe strongly that the industry needs an ad hoc rescue payment. We understand there are trade issues surrounding this, but we think we've figured a way around them. We think “no” is simply not an acceptable answer.
We have developed a 2008-09 Canadian hog sustainability supplement program. This program could benefit all producers across the country. I'll give an example of how our proposed program would work.
Eligible gross sales of hogs on any farm could be used in this calculation. The reference here for the 2008 payment year would be 2007-08. We have come up with a formula that uses the average eligible gross sales multiplied by the factor that we've derived. Our calculations are based on a farrow-to-finish operation. The expected cost of this program for the 2008 program year is $875 million. Using a 60%-40% federal-provincial split, as is normal, $525 million would be federal and $350 million would be provincial.
We came up with the factor using OMAFRA data that was in the appendices—which may have been taken out, because we didn't translate them to French. We apologize for that. The information was in our document, but it may not be in all of your copies now.
We took OMAFRA's information for the cost of raising a hog, divided by the value the hog was sold for, to come up with this factor. In 2007 the factor was 1.2, and in 2008 it was 1.3. The average of those years would be 1.25. That would be the additional value the hog producer needs to make up losses.
Given a sample calculation of a farmer who sells 2,000 hogs a year, using his eligible gross hog sales for 2007-08 times our 1.25 factor for that production year, that producer would be eligible for just short of $64,000.
The benefits of a program like this include: it is not a “per hog” payment; the factor is based on industry averages; the calculation is a two-year rolling average; it does not promote production, because it's after the fact; the calculation numbers should be available from AgriStability; it is simple to calculate; and the payment does not pay producers for commodities other than hogs that they may have produced in that reference year.
We carried through for a 2009 program using the same information, and in the same scenario, the overall cost would be around $1 billion to the hog industry.
In summary, in May 2009 the Canadian Pork Council, CPC, presented a request to Minister Ritz for an ad hoc hog payment of $30 a hog. That request was denied, our understanding is, because of trade implications.
In the appendix, there is a backgrounder from CPC. It says the Canadian pork sector contributes significantly to the Canadian economy, 70,000 jobs. Nearly two out of three hogs born in Canada are exported: $500,000 worth of live hogs, $2.7 billion worth of exported pork products. These exports create 42,000 jobs within our economy, $7.7 billion in economic data, and a total of $2.1 billion in wages and salary. These jobs and benefits are at risk.
We cannot afford to lose the hog sector in Canada.
Thank you.