Issue 266: August 2009

in

 Not Quite the Whole Hog

The newspaper headlines trumpet that hog farmers are ‘disappointed’ by the Federal Government’s announcement of a $92-million package to help bail out ‘the industry’ – as well they might be. Indeed, one could say that $92 million is a slap in the face, particularly since $17 million of it is to go to market research, not to farmers. The Canadian Pork Council’s survival plan called for $800-million to help farmers survive the current crisis. As one farmer put it, “We’ve got to do something. We can’t keep losing $50 a pig.”

This dire situation did not just happen, of course. Part of the cause is Federal agricultural policy. When the government repealed the Western Grain Transportation Act which subsidized the movement of grain by rail from the Prairies to seaports (the “Crow Rate”) in 1995, the suddenly cheap wheat and barley was an incentive to huge growth in livestock production, particularly swine. Inventories of hogs in Manitoba, for example, increased over 78% between 1995 and 2004. The low Canadian dollar relative to the US dollar encouraged exports, and approximately 2/3 of Canadian pigs went south. Changes in the US hog industry – the demise of ‘farrow-to-finish’ (typically smaller, family-run farms) in favour of large, vertically-integrated intensive operations – ireduced the total number of hogs produced. Slaughter facilities tied to this system and benefitting from cheap labour and more relaxed regulations out-bid Canadian abattoirs for hogs. When the Canadian dollar rose, it affected overseas markets for Canadian pork rather than the US-Canadian trade, and of course the fears engendered by “swine flu” didn’t help markets either. Meanwhile, the recent rise in the price of grain undid the effects of the death of the Crow.

Now a news story from the Brantford, Ontario, Expositor reports that farmers attending a rally organized by the Beginning Farmer Group in southwestern Ontario are beginning to call for supply management in some form to save Ontario’s pork industry from collapse, along with government support for mostly younger producers. As one farmer
commented: “I’m not saying supply management will fix everything but we have to do something.”

The paper quotes a farmer who runs a 2,000-hog farm saying it’s obvious that there is more supply than demand in the pork industry. He conceded the quota system used in the dairy, chicken and egg industries seems to be working. “No one wants to call it quota [in the hog industry] and no one wants to call it supply management,” he said.

Certainly bailing out the industry is not going to make it float. It is sinking because of gaping holes in its basic structure and assumptions.
The hog industry has been built on cheap grain, cheap oil, easy export markets, and the ideology of ‘bigger is better’. As in the US, the smaller, resilient family farms that raised pigs from farrow to finish on feeds that came from their own farms have been replaced by ‘intensive livestock operations’ (ILOs), also known as factory farms, with huge capital investments, where thousands of animals are housed in mega-barns and fed ‘scientifically developed’ grain rations, along with antibiotics to protect them from the inevitable diseases. Instead of finding a private corner in which to build their nests, sows are confined to metal crates for farrowing so they can’t accidentally lie on their piglets – who are weaned as young as 14 days “to maximize sow productivity”. The manure, which used to be a valuable by-product as fertilizer, has become a major environmental problem. Slaughterhouses are similarly set up to maximize throughput rather than considerations for either animals or humans.

There is an alternative, as we have frequently pointed out in the pages of The Ram’s Horn. Small-scale, low-tech animal production, integrated into a diverse farm, can be extremely efficient and both humane and environmentally sound. Pigs are marvellous creatures, able to use a wide variety of feeds and benefit from social interaction among themselves (production manuals for ILOs recommend providing toys for feeder pigs to keep them happy and to prevent such ‘vices’ as tail-biting).

The government approach, however, is to provide government-backed loans and payments to farmers to cut back on hog numbers for three years – by which time, they assume, their $17-million will have created new export markets and everything can chug along as before. The Canadian Pork Council’s president Jurgen Preugschas says, “There is no doubt those who come out the other side will have a higher debt load and that certainly will affect the competitiveness of the industry in export markets competing with people with less debt. But we believe it is the only way to maintain the industry.” The CPC is projecting that the industry emerging from the crisis will be ‘significantly’ smaller (with annual production dropping form 31 million hogs to 25.5 million) and less dependent on sale of live pigs to the US market (with exports of live hogs cropping from 9.3 million to 4 million per year). It is a dismal prospect: hog producers have no options other than to increase their debt load, seek beneficial repayment terms, restructure their industry and hope that market conditions improve.

It appears that the idiocy of maximizing production for export, at any price, is losing its grip on the minds of hog farmers. The obvious ‘solution’ to the ups and downs of hog supply and prices, and dependency on a market controlled by huge processors, is supply management. This would mean a sharp reduction in the hog population in Canada so that production (supply) would match domestic consumption, and no more. Such a herd reduction could be achieved by putting a cap on farm size so that hogs would be produced on smaller farms rather than in giant factories.


Sow Farrowing Crate

This is a golden opportunity to use and learn from the experience, and mistakes, of supply management in the dairy and poultry sectors. While supply and herd size would be managed by means of quota, quota would not be allowed to become a marketable commodity in its own right. If a farmer quit, the quota would return to the marketing board, to be allocated according to public policy priorities. Thus social and economic aspects of small-scale hog farming would take the place of capital-intensive industrial production. Pigs could then be welcomed back and take their rightful place in rural communities.

Moving in the opposite direction, the federal and provincial governments have agreed to require all Canadian livestock sectors to conform with mandatory traceability requirements (tagging every animal with a tag that stays with the animal – until it is cut up, that is) by 2011 for the sake of the export market. South Korea, Japan and China have said that in the future they will buy only age-verified and traceable ‘product’. This, of course, is one more cost that serves the interests of the big exporters and is virtually irrelevant for livestock produced for a local market.


Pigs on Pasture at Left Fields

 

#266: August 2009 TOC
Not Quite the Whole Hog: analysis of the Government's bail-out of the failing hog industry
Look But Don't Touch: Scientific American calls for open research on patented varieties
Fighting Food Terror: Kerala (India) State Ag. Minister calls for defense against 'greedy corporates'
and Supporting Organics: Brazilian Ministry of Ag booklet critiquing GM is distributed by civil society
We indulge in Schadenfreude: as Nestle's bottled water business declines
Making Promises Sound Like Facts: Washington University teams up with Gates foundation to save Africa again
Antibiotic Resistant Salmonella Recall: Cargill subsidiary BPI has to recall beef due to salmonella, also faces animal-handling charges
Consumers lose trust: IBM survey reports US consumers do not trust food companies
New GM Corn Not Tested: Globe & Mail report on "SmartStax" from Monsanto/Dow
Monsanto Business Plan: Keep Roundup prices high despite market share loss, look to GM seeds as profit centre
Cokecolonization: Coke doubles investment in China, its third-largest market
Colonization by Monsanto: teaching Indian farmers how to go into debt
Myth of Enhanced Yields: New study shows Bt Cotton performs poorly in India; company blames bad weather
No Yields: Colombian cotton growers face huge crop losses, want to sue Monsanto
Fake Real Food or Real Fake Food: analysis of Hellman's "Eat Real Local" website and campaign
Improvements?: Monsanto and Dole are working on 'improving' vegetable varieties