Hog Farmers Claim Provinicial Govt. Unfair

by 5m Editor
31 October 2008, at 10:59am

CANADA - Alberta's hog farmers made claims that the provincial government has been dishonest in secretly changing the rules of a life-saving funding program so producers get little or no money.

The province's Alberta Livestock and Meat Strategy released in June promised that payments under Alberta Farm Recovery Plan II would be separate from the federal Agristability program, Alberta Pork chairman Herman Simons said in an October 22 letter to Agriculture Minister George Groeneveld.

And the most recent instruction sheet on calculating recovery-plan payments to producers confirmed this, he said. However, the Agriculture Financial Services Corp., which administers the program, quietly changed the document October 14 so producers, their suppliers and lenders will not receive any payments, or very little, said Simons, who farms at Tees, 25 kilometres east of Lacombe.

"If the government is going to unilaterally change the terms of our partnership, then how can our industry trust that the government will not do so again?"
Herman Simons, Alberta Pork chairman

"It is extremely troubling that government chose to not involve nor inform the livestock industry of this crucial change," Simons said in the letter. "Such action displays a lack of honesty, integrity, transparency and respect."

Simons said the industry supported the Alberta Livestock and Meat Strategy as a partnership that would provide interim funding during the transition to a new way of doing business.

"Acting in good faith, producers, their suppliers, lenders and advisers relied on the clear and detailed documents from government that encouraged producers to calculate their future payments under the (farm recovery plan)."

The payments gave producers the confidence to remain in the industry, and persuaded financial institutions to continue to support them, he said.

"If the government is going to unilaterally change the terms of our partnership, then how can our industry trust that the government will not do so again?

"Without trust, the most fundamental aspect of any relationship, there is no possible way the (livestock and meat strategy) can be successfully implemented."

Merle Jacobson, vice-president of risk management for the Agricultural Financial Services Corp., said there was no surprise change.

He said a fundamental part of the Agristability program is that compensation from other sources is included when a producer's income is evaluated.

"Producers shouldn't be paid twice for the same loss," Jacobson said. "This is not anything different."

Alberta Agriculture and Alberta Pork will meet to discuss the controversy and find out where things might have gone wrong. "Communications perhaps could have been better, but that is something we'll have to talk about," Jacobson said.

Simons said in an interview he's meeting government officials in early November to try to resolve the issue.

He said he stands by his strong language in the letter.

Under the change, the Alberta Financial Services payment is added to the eligible income for the Agristability program, and that means producers "will lose a lot of money," he said.

Meanwhile, the province has promised no announcements on changes to the formula until after the meetings, he said. reports that the document change involved including recovery-plan payments in the Agristability program's reference margin, calculated from the difference between income and cash costs over the previous five years. If the margin is lower than the reference then a payout is triggered. If it is higher there is no payment.

5m Editor