Loan Approved for Pork Producers
Agriculture and Marketing Minister Ed Lorraine today announced the government has approved a $3.5-million loan request from Pork Nova Scotia to support pork producers hit by a severe downturn in world hog prices.
The loan will be funded through the Department of Economic Development and Tourism.
"Pork is just too valuable to the agricultural industry and the economies of our local communities for us not to respond to a crisis that could wipe out the entire sector," said Mr. Lorraine. "Hog producers in this province are considered among the best farm managers in North America. This is a worldwide problem that is out of the control of our producers. The government wanted to let them know we are here to help them through this price depression."
"Our farming and rural communities sometimes need help in tough times and that is where government can and should help," said Manning MacDonald, Minister of Economic Development and Tourism. "The hog sector supports the local economies across our province and supports Nova Scotian families. We cannot let temporary difficulties damage a pillar of our rural way of life."
The loan will be used to cover a deficit in the provincial Pork Risk Management Service, a fund that supplements producers' incomes during periods of low prices. The fund, which is cost-shared by government, producers and processors, has been making substantial payments to producers in an effort to keep their operations open and is now depleted.
Last week, the three partners agreed to double their contributions to the fund to $7 per hog, from $3.50. However, even with this increase, it is projected the fund will not show a surplus until mid-2000.
World pork prices have been steadily declining over the past several years. For example, in January 1998, hog producers received an average price of $1.28 per kilogram. Last month, that average had fallen to 74 cents per kilogram.
This drastic price drop is due mainly to a rapid increase in the North American production and processing of hogs, which has meant a flooding of the market. This, compounded by a decrease in demand, particularly by Asian markets, has created a crisis in the pork industry.
Nova Scotia's pork industry consists of 93 commercial producers that market 225,000 hog per year. In 1996, the sector generated $37 million in sales. While 200 to 250 direct jobs can be attributed to the province's hog sector, that does not take into account the number of indirect jobs supported at farm equipment and feed suppliers and processing facilities, including Larsen Packers in Berwick, which employs more than 300 people.