Cash Payment to Cow/Calf Producers

Res #: 17-08M
Number: 17
Year: 2008
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Agriculture and Agri-Food Canada

Whereas the loss on a cow/calf operation is so severe that the primary producer is selling livestock to meet operational obligations; and

Whereas a loan on a loss does not make “common sense” financially;

Be It Resolved that SARM lobby the Provincial and Federal Governments to implement a cash payment to the primary producers to help manage the shortfall.  

Response from Honourable Gerry Ritz, Minister of Agriculture and Agri-Food:

The Government of Canada recognizes the difficulties that cattle producers are facing. This is a matter this government and I take very seriously. 

Regarding your proposed assistance program, we are committed to a national, whole-farm approach to risk management programming that helps us avoid trade actions which helps producers make their decisions based on market signals. 

This government, together with our provincial and territorial partners, has replaced the much criticized Canadian Agricultural Income Stabilization program and is now delivering a suite of business risk management (BRM) programs that is more responsive, predictable and bankable than ever before. I am pleased with how these new and improved programs have responded to the current challenges in the cattle sector. The new suite, which includes AgriStability, with features such as interims, Targeted Advance Payments, improved negative margin coverage and a better method of valuing inventories, has allowed governments to target assistance where needed and to get it into the hands of producers more quickly than was previously possible.  

The Government of Canada’s AgriInvest kickstart payments have provided further assistance to the livestock sector during this difficult time. To date, producers in Saskatchewan have received $105 million in initial kickstart payments, and I expect final payments to be made early this year. 

In February 2008, this government amended the Agricultural Marketing Products Act to remove the requirement to use a BRM program as security for a cash advance, add “severe economic conditions” as a condition for offering emergency advances, and increase the level of emergency advances under the Advance Payments Program. These changes have resulted in an increase in the availability of loans for producers, including those in the cattle sector. In fact, as of December 16, 2008, 441 livestock producers in Saskatchewan have benefited from loans totalling nearly $28.1 million, including close to $7.7 million in emergency advances to 101 livestock producers. 

This government also recently committed $50 million over three years to strengthen Canada's slaughterhouse capacity across the country, and we reaffirmed this commitment in Budget 2009. The program will make federal contributions available to match private sector investments in sound business plans aimed at reducing costs, increasing revenues and improving operations of meat slaughter and processing operations in Canada, with a view to ensuring that Canadian livestock producers have viable and sustainable slaughter options available to them. We are currently working on this program, and more details will be made available once this process is complete. 

The Government of Canada also recently announced $500 million over the next five years to implement an agricultural flexibility program, and we strengthened our commitment to this initiative with Budget 2009. This new program will facilitate the implementation of new initiatives, both federally and in partnership with the provinces, territories and industry. It will help the sector adapt to pressures and improve its competitiveness by funding non-BRM measures, such as those that will reduce costs of production, improve environmental sustainability, promote innovation and respond to market challenges. I am now working with my provincial and territorial counterparts to assess the needs of their agricultural industries, determine how this money can best be used and ensure our programs deliver real results for Canadian farmers.