On May 7, 2020, the government of Alberta announced financial support for agricultural producers in response to market disruptions due to COVID-19. Support will be provided through the AgriRecovery program.
Beef, pork and potato producers in Alberta have faced significant price declines due to market disruptions caused by COVID-19, including temporary closures of meat processing facilities and reduced demand for certain agricultural products, like french fries.
AgriRecovery initiatives are cost-shared 60/40 between the federal and provincial governments and are intended to provide additional cash payments for producers dealing with natural disasters and extraordinary costs. The program is intended to work alongside other business risk management (“BRM”) programs like AgriStability, which are also cost-shared at the federal and provincial levels.
Details of the government of Alberta announcement are as follows:
- Fed cattle set-aside program – cattle producers in Alberta will be compensated for extraordinary costs to hold slaughter-ready cattle on a maintenance feed ration allowing supply to match demand and reduced processing capacity. The Alberta portion represents $17.3 million under AgriRecovery, which funds the province’s 40 per cent contribution for a total $43.2 million fed cattle set aside program. Currently, there are 130,000 cattle backed up in feedlots due to reduced capacity in major beef processing plants in Alberta.
- AgriStability for Pork Producers – the government of Alberta will immediately increase the interim payment under AgriStability from 50 per cent to 75 per cent. This will result in up to $25 million for pork producers or the equivalent of $20 per head.
- AgriStability for Potato Producers – the government of Alberta will increase the advance payment under AgriStability from 50 per cent to 75 per cent to put additional cash in the hands of potato producers impacted by reduced demand.
The support of the government of Alberta builds on an announcement by the Federal Government to launch a national AgriRecovery initiative of up to $125 million for beef and pork producers impacted by COVID-19, including support for cattle-set aside and hog recovery programs. The announcement also committed to an increase in AgriStability advance payments from 50 up to 75 per cent, funding for a Surplus Food Purchase Program, among other initiatives.
These supports will provide assistance for agricultural producers in Alberta facing market disruptions. Beef, pork and potato producers make up an important part of the agricultural sector in Alberta. According to information provided by the government of Alberta:
- Alberta is Canada’s largest cattle-producing province, with 40.5 per cent of the national total cattle and calf inventory in 2018;
- Beef is Alberta’s second-largest agri-food export, at $2 billion in 2018;
- Alberta accounts for 10.4 per cent of Canada’s hog production, or about 2.8 million market hogs per year; and
- In April, the Potato Growers of Alberta estimated Alberta has $70 to $80 million worth of potatoes in storage, which is higher than one-quarter of the national inventory.
Further details about how producers can access these programs are yet to be announced.
For more information concerning these support programs, please do not hesitate to contact a member of our food and agribusiness group. In the meantime, the MLT Aikins food and agribusiness team will continue to monitor the situation and provide additional updates on legal issues that may impact businesses in the agriculture sector.