The federal government is donating $169,530 for a
Canadian Pork Council study into using hedging to reduce market-price risks for
farmers.
I have a question for these people. Where have they been for the past 30 years while Larry Martin of the George Morris Centre was urging farmers to use hedging strategies to reduce the risk of market-price fluctuations. And he ran seminars and courses to teach them. And they didn't cost taxpayers a penny.
But I will say this for them. It's about time they realize that hedging is likely to cost a whole lot less than taxpayer-funded industry bailouts.
“Under the project, consultations will occur with
producers, financial institutions, packing plants, and organizations providing
risk management services to producers for their assessment of this risk,” says
a news release from the federal agriculture department.
The hog industry is the fourth largest agricultural
industry in Canada with cash receipts of $3.9 billion in 2011.
“The hog industry typically experiences price
volatility and producers manage through a limited selection of short-term risk
management instruments offered by hog marketers, packing plants, or producer
associations,” says the government.
The funding comes AgriRisk Initiatives (ARI) which
supports the research and development as well as the implementation and
administration of new risk management tools for use in the agriculture sector.
ARI is a Growing Forward 2 Business Risk Management initiative.
"Our government is proud to support the hog
industry’s efforts to analyze the potential of new instruments, like a hedging
program, that would help protect producers against fluctuations in market
prices,’ said MPP Bev Shipley of Lambton-Kent-Middlesex who is chair of the
House of Commons agriculture committee.
“Investing in
programs to reduce risk adds stability to the hog sector and will help boost
competitiveness and profitability."
Bill Wymenga, vice-chair of the Canadian Pork Council,
said "hog producers face a combination of production, market and financial
risks that can undermine the success of a farm without a range of risk
management tools and strategies.
“This project will explore the feasibility of a
program that can mitigate the risk of margin calls so that hedging becomes a
useful and used business risk management tool."
