Economics

 Industry Partners


Prairie Swine Centre is an affiliate of the University of Saskatchewan


Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.

Financial support for the Enterprise Model Project and Pork Insight has been provided by:



Author(s): K. Grier
Publication Date: June 4, 2012
Reference: Advances in Pork Production, Volume 23. 2012.
Country: Canada

Summary:

Four of the government programs in Canada to help the pork industry are the federal AgriStable program, Assurance Stabilisation des Revenus Agricoles (ASRA), Risk Management Program (RMP), and the Alberta Hog Price Insurance Program (HPIP). The AgriStability program provides payment when producers fall below 85% of their previous margin (income-expenses) for the last 3-5 years. The payment is 60-80% of the loss, depending on the margin. For ASRA, a stabilized income is the cost of production plus a return. Payments are made if the average selling price is less than the stabilized income, and are reduced by 40% if the producer is not part of AgriStability. RMP requires premiums paid in advance and enrollment in AgriStability, and producers receive the higher support from AgriStability or RMP, but not both. RMP is tied to AgriStability, and the benefit of RMP is only seen if the RMP payment would be greater than the provincial portion of AgriStability. However, RMP should potentially pay out in sync with market drops, which does not necessarily happen with AgriStability. HPIP locks in a market price in return for the payment of a premium, and pays if the market price drops below that point. In evaluation of the programs ASRA provides good assistance, but the program is overdrawn; and AgriStability smooths out fluctuations, but doesn’t help with long-term declines in the market. RMP does not appear to benefit producers enough to justify paying the premium; although, it may benefit producers with low AgriStability margins. HPIP has not been received well because of the premium required, no current payouts, and lack of government funding.

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