USDA's program of $50 million in direct cash payments to pork producers was a good-faith gesture. But it didn't go nearly far enough, say industry leaders.
National Pork Producers Council (NPPC) President Donna Reifschneider characterized it as "the first step in addressing the liquidity crisis facing pork producers." She says NPPC was informed of the limited resources for such a program and stressed NPPC would continue to work with USDA and Congress to find ways of providing additional cash infusion to pork producers.
The USDA program only applies to producers marketing fewer than 1,000 market hogs during the last six months of 1998. Maximum payment is $2,500.
Reps Marcy Kaptur (D-Ohio) and Tom Latham (R-Iowa) have introduced a resolution urging the Clinton Administration to take immediate action to help financially strapped producers. The resolution calls for: passage of a supplemental appropriations bill for direct and guaranteed farm ownership loans; a report to Congress (by Feb. 1) on a potential disaster assistance program for pork producers; expanded loan and debt restructuring programs; and producer compensation for lost markets from the flood of hog imports into the U.S.
American Farm Bureau Federation (AFBF) leaders meeting with Secretary of Agriculture Dan Glickman outlined a federal short-term loan program to aid pork producers who may be forced out of business because lenders are refusing to continue financing.
Under the Farm Bureau plan, loans would be made to producers for the number of feeder pigs, barrows, gilts and sows marketed for slaughter between Oct. 1, 1998 and April 1, 1999. The loan would be repaid when hog prices go above a set price.
State Funding Efforts A number of states surveyed have proposed funding initiatives to help beleaguered pork producers:
Iowa: The Iowa Department of Agriculture proposes a Livestock Economic Emergency Program. It offers three packages of federal and state financial assistance.
The first package is a federal/state interest buy-down and loan guarantee option. The second package is an interest buy-down and loan restructure option, while the third plan offers financial planning and mediation.
State officials stress this plan is aimed at helping family pork producers. To qualify, gross farm income must exceed $50,000 and 50% or more of it must be derived from livestock sales.
Illinois: Under a $50 million program announced by Gov. Jim Edgar, the Illinois Farm Development Authority (IFDA) is working with local lenders to offer pork producers guaranteed loans at lower interest rates.
The program is designed to consolidate and extend existing debt over a longer term at reduced rates. Applicants must derive 50% or more of their income from farming, have a debt-to-asset ratio between 40% and 65% and have sufficient collateral and cash flow. Maximum loan is $500,000. Contact the IFDA at 1-800-406-4332.
Minnesota: Gov. Jesse Ventura has budgeted $10 million to go to the "hardest-hit" farmers. An $80 million property tax relief bill for farmers is being proposed by the Minnesota House of Representatives Republican Caucus.
The Republican proposal would givelivestock farmers with 160 acres or less half of their property tax payment. Those who rent or own more than 160 acres of cropland will receive $4 cash/acre to apply toward their property taxes.
South Dakota: Pork producer delegates at their annual meeting in early January passed a resolution calling for $1 billion in federal aid.
They also asked Gov. Bill Janklow to consider a state disaster assistance program.
"Our estimates are it will take about a billion dollars for any payment plan to be meaningful to our family farmers," points out Dennis Michael, state pork producer president.
Wisconsin: Gov. Tommy Thompson recently approved an emergency loan program. The $5 million program features a $50,000 loan limit and three-year repayment period. Applications are available on a first-come, first-served basis. Applications must be received by July 31, 1999. To qualify, farmers must have derived at least 30% of their income from hog production. For more information, contact your local lending institution.