AgCanada Daily

Feds back pork producers with new levy on imports

By November 8, 2020No Comments

A new agency will use funds from a new levy on imported pork to pay for research and promotion for the Canadian pork sector.

Federal Agriculture Minister Marie Claude Bibeau on Thursday officially announced the creation of the Canadian Pork Promotion and Research Agency (PRA).

The Farm Products Council of Canada (FPCC) and Agriculture and Agri-Food Canada are now working with the Canadian Pork Council get the PRA established; it’s expected to be fully operational by the summer of 2021.

The idea of such an agency has been floated by the pork council for nearly a decade as a way to improve the current system used by the sector for promotion and research, characterized until now as a patchwork of efforts at the provincial level.

“The PRA will be an important vehicle for producers – it will help facilitate even greater collaboration across the value chain through increased research and promotion activities. In the long run, it will result in improving the long-term growth and competitiveness of the sector,” council chair Rick Bergmann said in a statement.

By receiving funds from a 75-cent levy on imported live pigs, and a charge on imported pork meat, the agency can provide $2 million in additional research and promotion, the council estimates.

The PRA is also authorized to have a levy on marketings of hogs in interprovincial or export trade. That levy would continue to be collected by provincial pork boards and a portion turned over to the PRA for national-level work.

The new organization will be led by the industry, Bibeau said in an interview Thursday.

“The federal government is not taking over in any way, it’s really their wish to join forces,” she said. “I believe working together, joining forces, there will be economy of scales in the type of initiatives they launch through the PRA.”

Canada’s nine provincial pork associations will be responsible for ensuring PRA dollars are spent effectively, while the national organization is expected to provide them with opportunities to collaborate on various research and development projects.

Canada’s hog producers last month called on the federal government to invest $50 million over three years to combat African swine fever (ASF). Since 2018, the disease has spread into several European countries and every region of China, but no cases have been reported in North America.

The new entity doesn’t come with that federal investment as requested, but Bibeau said the PRA will still help the industry combat ASF.

“They would have more resources to better prepare, get better organized, make more prevention activity — to first, obviously, try to avoid having this disease on our territory,” she said. “And if we have it eventually, hopefully not, but we would be better prepared to face it.”

Ottawa will have little, if any, say in where the organization directs its dollars. The PRA’s board will be made up of industry stakeholders, responsible for deciding how and where the money raised will be spent.

The promotion and research model has been tested in other sectors. The Canadian Beef Check-Off Agency, the only other such national promotion and research agency, generates about $7.5 million each year, funding projects to expand markets and increase sales.

Canada imported 157,026 tonnes of fresh and frozen pork in 2019 and another 233,699 tonnes of processed pork, mostly from the United States.

The 75-cent per head import levy, if fully passed on to consumers, is expected to increase pork costs to the average Canadian by six cents per year, based on 22 kilograms annual per capita consumption — a level which an FPCC panel reviewing the proposal considered to be “marginal,” the government said.

The CPC originally submitted its proposal to the FPCC in 2015 for creation of the PRA. The creation of the agency was proclaimed in the March 7 edition of the Canada Gazette.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.