FCC SUPPORTS CUSTOMERS IN THE HOG SECTOR

Farm Credit Canada (FCC) is offering support to hog sector customers in Ontario, Quebec and the Atlantic provinces facing financial hardship as a result of the current crisis in the hog industry.

Hog industry partners have faced numerous challenges in recent years, including the pandemic, labour shortages, increased input costs and higher interest rates, packing facility closures, etc. These adverse conditions have impacted the financial performance of hog farms.

“Agriculture and food is the only industry we serve, so we have a deep understanding of the challenges that come with the business,” said Manon Duguay, FCC vice-president of operations for Quebec and Atlantic, in announcing the customer support.

“Hog producers may face a cash shortfall in addition to personal hardship and stress,” Duguay said. “We stand by our customers over the long term, helping them pursue opportunities and overcome challenges. Producers need our support and as a leader in financing to Canadian farmers, we have a responsibility to step up and help.”

“We’re monitoring the situation closely and have been in touch with our hog customers over the past several months. This announcement reinforces what we have already put in place. We stand ready to assist them with any short-term financial challenges they may face as a result of this accumulation of unfavourable production conditions.”

Demand for red meat is expected to be strong in the coming months, according to FCC’s Cattle and Hog Outlook Update, as barbecue season approaches in Canada.

Pork has been increasingly more affordable compared to other major proteins over the past few months, which could drive increased consumption.

“The affordability of pork means that producers who are well positioned in the domestic market could benefit from increased demand in the coming year,” explains J.P. Gervais, FCC’s chief economist. “The challenges in the hog sector won’t be resolved quickly, especially in the East with less slaughter capacity and reductions in the Quebec hog herds. While 2023 will be difficult, there is positivity for 2024 and beyond with the new future profit-sharing options between Quebec processors and producers.”

Customer support is a central part of FCC’s business. The federal Crown corporation will consider additional short-term credit options, deferral of principal payments and/or other loan payment schedule amendments to reduce financial pressures on hog producers. FCC will also offer flexibility, and even a combination of options based on the individual needs of its customers, since each farm financial situation is unique.

Hog sector customers who are experiencing cash flow pressures are encouraged to contact their FCC relationship manager or the FCC Customer Service Centre at 1-888-332-3301 as soon as possible to discuss their individual situation and options.

Although FCC customer support is being offered in specific locations, Canada’s leading agriculture lender offers flexibility to all customers through challenging business cycles and unpredictable circumstances on a case-by-case basis.

FCC is Canada’s leading agriculture and food lender, dedicated to the industry that feeds the world. FCC employees are committed to the long-standing success of those who produce and process Canadian food by providing flexible financing, For more information, visit fcc.ca.

How

You do not need to be a farmer to drive around most cities across the Prairies and see what once was working farmland on the outskirts of town turn into a concrete field of houses and overpriced condos. Growing up in and around Winnipeg, I can already tell newcomers that these kilometers of urban sprawl we are walking through were once open fields with wheat as far as the eye could see only a few years ago. Now living on the outskirts of Calgary I can say the same thing - although there are still quite a few holdouts, with farmers working the land in between large development projects and cows wandering a little too close to construction sites.

Provincial regulations governing farmland are also changing as different provinces try to prioritize housing shortages while also having to face the fact that family farms are diminishing.

One proposed provincial regulation that made quite a stir recently was Ontario’s Bill 97: Helping Homebuyers, Protecting Tenants Act, that would give all municipalities the ability to divide up farms into smaller lots that could be sold to developers, making it easier to build residential homes on arable land.

The bill had many farmers upset at the prospect of rural arable land being sold off allowing for greater urban sprawl. Of course, the issue is not providing people with housing as most Canadians are well aware of the housing crisis happening nationwide. However, arable land is a finite resource and developing on rural farmland may not be the best way to tackle this problem.

The good news is that the Government of Ontario has acknowledged the concern of our farmers and is revising the housing on agricultural land clause in Bill 97. There must be a balance between having a roof over everyone’s head, while also being able to provide safe and abundant food. We cannot compromise one for the other.

The loss of arable land is not a unique problem found in Ontario. In February of this year, P.E.I made headlines in the media as the loss of the province’s farmland has been accelerating at a rate like none other, losing 12 per cent of its farmland from 2016 to 2021. Newfoundland and Labrador also found itself in the media last year after published research showed the province lost over half of its farmland since 2001.

These Provinces Are Just The Tip Of The Iceberg

According to Statistics Canada’s most recent Census of Agriculture, Canada has lost over 5 million acres of farmland from 2016 to 2021. Farm-heavy provinces such as Manitoba, Saskatchewan, and Alberta account for nearly half (2.9 million acres) of the lost farmland reported.

The issue of losing farmland is worrisome not just because of the reduction in available space that farmers can use to cultivate fresh food, but also because it is driving up already incredibly high land prices. Speaking to this, a recent CBC article highlighted how the rising cost of farmland was making it harder than ever for young farmers to enter the industry and we have been hearing the same issues from CFIB members.

As the majority of current Canadian farmers reach retirement age and begin saying goodbye to working full-time in the industry, policy makers need to find a way to attract the next generation of primary producers. Land is not the only expensive aspect for a successful farming operation. Equipment, employees, and other input costs are at all-time highs. These expensive barriers to entry into the agriculture industry will only dissuade more youth and make living the urban life a lot more attractive.

Acknowledging this issue, the Government of Manitoba has also recently announced changes to its agricultural policies – taking a step back from regulations implemented in 2019. Earlier in June, Manitoba announced proposed changes to the Agricultural Crown Lands Program. These changes would bring back the unit transfer of crown land, where producers can transfer a crown land lease along with the deeded land lease to the buyer of their farm. Before, crown land could only be a part of an intergenerational transfer to try and get more young people into agriculture. However, this tactic has failed in getting new farmers into the industry, and the Government has decided to reinstate unit transfers to help producers maintain and/ or increase the value of their land.

Policy makers must remember that farmland is the foundation for the livelihood of farmers. To battle the housing shortage, urban land use and community design must also be reconsidered. Perhaps getting “back to normal” after the pandemic is not the best way to go and we can all recover better than how we started. However, to do so, policy makers and stakeholders must come to the table together.

Brown is the Senior Policy Analyst, National Affairs & Agri-Business for the Canadian Federation of Independent Business (CFIB).

CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members (6,000 agri-business members) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.