The provincial government has given approval in principle to a new loan program for hog producers.
"Hog producers continue to face serious financial pressures, and the average price this year is in fact lower than for 1998," said Agriculture and Forestry Minister Eric Hammill. "Given the importance of the industry to the province, and to protect the major investments made by producers, this loan program will help to ensure the survival of the industry until such time as market conditions improve."
The program is similar to the Hog Bridge Loan Program which was available from late 1998 to March 31 of this year. It will be financed by the Prince Edward Island Lending Agency at its cost of borrowing.
Mr. Hammill said his department has estimated that the maximum amount of loans to be made available would likely range from $1.0 to $1.5 million. Loan eligibility will be based on hog marketings between April and December of 1999 at a $10 per hog basis. Repayments would be made from assignment of funds provided to producers under the federal-provincial Agriculture Income Disaster Assistance (AIDA) program.
Final details of the hog loan program, including further loan repayment provisions, will be developed by the department, the Lending Agency and the Prince Edward Island Hog Commodity Marketing Board.
Under the previous loan program, a total of $3,275,000 was made available to producers. More than 60 percent of that has been repaid under assignment of producer payments from a combination of the Agriculture Disaster Insurance Program and the AIDA program. The balance will be repaid when hog prices reach $1.60 per kilogram.
"Recent changes in the AIDA program mean that hog producers are likely to receive the same level of support for the 1999 tax year as they received in 1998," said Mr. Hammill. "The AIDA program, along with this new loan program, is a clear demonstration of our commitment to the future of the hog industry."
The Island's hog industry, with about 320 producers, has a farm gate value of approximately $25 million annually, and a spin-off of $100 million to the provincial economy. It accounts for more than 1200 jobs.
Final details of the new loan program will be announced in the near future.