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Government Policy Blamed for Pork Farms Bankruptcy

by 5m Editor
3 April 2008, at 9:17am

SASKATCHEWAN- A flawed federal farm support program is being blamed for the bankruptcy of Saskatchewan's second-largest pig producer Stomp Farms Ltd. The Leroy-based business employs 250 people and has been losing money since late last summer.

Neil Ketilson, general manager for the Saskatchewan Pork Development Board, says owner Ivan Stomp has been a victim of good corporate practice. All of his facilities are owned by one corporation and thus restricted to a $3 million cap of assistance from the federal government.

A report in the Star Phoenix, says that SaskPork estimates that pork producers across Canada, including Saskatchewan, have lost between $40 to $60 for every hog delivered to the market between last October and now. A relief program developed by the federal government has limited producers' support to a maximum of $30 a hog. Ketilson points out that Stomp Farms delivers about 500,000 hogs to the market each year and because of the cap of $3 million per operation, Stomp would have been only eligible for about $6 a hog.

Ketilson says Stomp Farms is being penalized for its corporate efficiency. About three years ago, Stomp Farms bought up the barns that were formerly owned by the Heartland Livestock division of the former-Saskatchewan Wheat Pool. Ketilson says if Stomp had kept those barns as separate corporate entities the company would have not faced the same caps on help.

"If you were farming the government programs, you would have set up every barn as a separate corporation and, quite frankly, you wouldn't hear from the guy because he would be doing well," Ketilson said.

View the Star Phoenix story by clicking here.

5m Editor