On August 29, on behalf of the Alberta Pork Board of Directors and registered pork producers in Alberta, Brent Moen, Chair, Alberta Pork sent a letter to Marie-Claude Bibeau, Minister, Agriculture and Agri-Food Canada, requesting compensation at $12 per pig for Canadian pork producers, to offset losses resulting from U.S. subsidies to producers and the ban on Canadian pork exports to China.
On September 4, representatives from Alberta’s pork industry met with Amarjeet Sohi, Minister, Natural Resources Canada, on behalf of Minister Bibeau, to discuss topics relevant to the pork sector, including compensation for producers. Our request for compensation has not yet received formal response.
Leading up to the 2019 Canadian federal election next month, Alberta Pork is interested in meeting with other Members of Parliament, Ministers and candidates to discuss the challenges facing pork producers.
See a PDF of the full letter or read the text below.
Dear Minister Bibeau:
Pork producers in Alberta have been impacted by political trade tensions beyond their control. These include tariffs imposed by China and Mexico on U.S. pork as a result of American sanctions on aluminum and steel imports, and more recently, China’s ban on Canadian pork imports, which has halted our exports to that market.
These adverse market conditions are causing significant financial losses to pork producers in Alberta and across Canada. For producers in Western Canada, this is especially difficult as the current nature of the market means Western producers earn, on average, $7-9/pig less than producers in Eastern Canada, even before factoring in the negative impact of the current political tensions.
While market conditions for Canadian pork have suffered due to trade friction and diplomatic tensions, other pork-producing nations in Europe and South America are benefiting from the opportunity to supply the rapidly increasing demand for pork in the highly profitable Chinese market. The spread of African Swine Fever in China and most countries of Southeast Asia has upended markets and dramatically increased the price of pork. Pork-producing countries that are able to export to China are benefiting most from this situation, while countries like Canada are missing out due to tariffs and political barriers.
As a result of the conditions in China, pork exports from the European Union and Brazil are increasing significantly. Canada would have been able to capitalize on the situation if our exports had not been halted. Our competitors will take advantage of the additional revenues generated by Canada’s absence in the market to invest, modernize and increase their production capacity, thereby strengthening their global agri-trade position.
Twice in the past year, the U.S. Government has allocated significant funding supports totaling $28 billion to counter the effects of China’s tariffs on U.S. exports. In 2018, hog producers in the U.S. received $8/pig (to a maximum of $125,000 per producer, and in 2019, they received $11/pig (to a maximum of $250,000 per producer).
Given the need to operate transparently in the North American free trade environment, Canada’s pork industry is fully integrated with the U.S. pork industry. As a result, pork prices for Canadian producers are established based on prevailing prices in the U.S., which means Canadian producers are feeling the full effect of the U.S. trade war with China. However, producers in Canada are not currently receiving equivalent supports to their U.S. counterparts. This imbalance in subsidies has negatively affected the Canadian pork industry domestically and globally.
Pork producers have had no control over the negative market conditions that have impacted them for more than a year. Our competitors have continued to develop under more favourable conditions, either by avoiding trade and diplomatic tensions or by receiving prompt and substantial financial support.
Canadian pork producers participate in provincial and federal business risk management (BRM) programs and have been told repeatedly that these programs are the support mechanisms that work for all in agriculture. Unfortunately, time and time again, it has been demonstrated that these programs – as designed – offer little support. It is especially difficult for pork producers to accept this given trade-related supports afforded to other Canadian agriculture commodities.
Under these circumstances, our hope is that the Government of Canada will implement support mechanisms for Canada’s pork sector so that it can remain competitive in the global market, given the nature of the negative trade situation. Alberta Pork asks that the Government of Canada take a position to help counter these conditions by implementing strategic measures that would see federal funding of $12/pig to support our sector.