Officials within Canada’s pork industry will be closely monitoring the ability of producers to access loans under a new federal Loan Loss Reserve Program being offered through Canada’s chartered banks, credit unions and Farm Credit Canada.
Details of a new federal loan program and a new Hog Farm Transition program and application forms for the two programs were made available to pork producers last week.
Manitoba Pork Council chair Karl Kynoch says pork industry officials will be keeping a close watch on the loan program to determine whether producers are actually able to access that money.
Some of the challenges are going to be producers have to go to their banks and try and show a viable business plan.
I’ll tell you that’s really going to be hard to show a normal viable business plan right now for we’ve been losing money for two and a half years and we’re looking at future markets which have got another 12 months of basically losing money again.
A lot of producers have borrowed everything that they can get.
They’ve put their operating loans to the limit, they’ve spent their savings accounts and everything else so the challenge is going to be what equity they have left to show to go against the loans but we’re really going to be watching the banks to see how they react to it.
We’ve had a couple of comments come back already that producers were fairly challenged to be able to get the money from the bank.
One of the big issues on this is a lot of producers have an advance payment out right now, a cash advance, and we got those advances put in a stay of default so that they didn’t have to pay them right away but the one thing the government is enforcing is that producers, when they take the loan out, the first thing that they’ve got to pay off is that cash advance.
So it depends on how much money they can borrow.
Some producers by the time they pay that cash advance off aren’t going to have anything left to work on other bills so we’ll be watching that real close to see what levels of money they can access.
Kynoch says there is a lot of interest among producers in accessing the loan program but, at this point, there appears to be an even higher level of interest in accessing the Hog Farm Transition program and exiting the industry.
For Farmscape.Ca
