Federal loans threaten P.E.I. livestock farms
A demand that federal loans be repaid within the next two years could mark the end of livestock farming on P.E.I.
The industry has already shrunk to a tiny fraction of what it was a few years ago.
There are only about 20 hog farmers left on P.E.I., down from about 400 in 2002. Beef producers have fared better, but there has still been a dramatic decline.
Two years ago the federal government loaned $17.4 million to dozens of Island beef and hog producers. Prices for livestock were down, and the money was meant to tide farmers over until economic conditions rebounded.
But conditions have improved only slightly, and now Ottawa is looking for its money back. It wants repayment over the next two years. Each producer owes between $80,000 and $180,000.
"Those producers that are left, they're really still struggling with the commodity market," Ernie Mutch, one of almost 160 Island livestock producers who took out a loan, told CBC News.
"If we're being asked to pay back this money in such a short term, it's probably going to put a lot of producers that are just on the bubble now at risk of going out of business."
The P.E.I. Federation of Agriculture is predicting an 80 per cent default rate on the loans if government doesn't ease the terms.
"For these producers to try to pay this back at this point in time, I just don't see that's possible," said federation executive director Tim Seeber.
Some of the farmers are already out of business. Half of the 35 Island hog farmers who took part in the program have closed their barns. It's not clear yet how government will deal with them.
P.E.I. MP and Liberal agriculture critic Wayne Easter said Ottawa has to give the farmers more time.
"This'd be the nail in the coffin to our livestock industry, if the federal government continues to go ahead and push the kinds of terms on this advance payment they're currently talking about," said Easter.
Easter, farm groups and the provincial government are all asking the federal government to give farmers 15 to 20 years to pay back their loans, rather than asking farmers to pay in full over the next couple years. Otherwise, they say, this program meant to sustain the livestock industry on P.E.I. could instead bring it to an end.