Washington - The National Pork Producers Council continues to ask for assistance from the federal government for the economic crisis pork producers are enduring. In a letter to Secretary of Agriculture Dan Glickman, sent Dec. 31, 1998, producers thanked the administration for earlier assistance but urged additional action.
The letter, signed by NPPC President Donna Reifschneider, a pork producer from Smithton, Ill., asked for the prompt consideration of comprehensive proposals to address the continuing liquidity and capacity crisis facing U.S. pork producers. The recommendations include:
1. Guarantee Loan Programs: The Administration should request significant additional funding for the FSA Guaranteed Farm Ownership (FO) program, Operating Loan (OL) program and the Interest Assistance program for pork producers in a FY 1999 emergency supplemental appropriation bill to Congress. We are being advised that current funding for these programs will likely run out by February 1999.
2. Debt Restructuring: USDA should implement a disaster loan program for pork producers. This direct FSA loan program would allow producers to restructure debts, incurred because of this crisis, outside their “normal” lending relationship. FSA would take a subordinate lien position, which would allow producers to maintain their existing lending relationships. The loans should be at reduced interest rates with repayment terms based on cash flow ability. Additionally, the Administration should communicate with both State and federal banking regulators as well as the Farm Credit Administration the need for consistent policy regarding restructured loans and loans in forbearance. Undue criticism by bank examiners regarding these actions (restructuring & forbearance) will deter banks from considering these actions. This policy should also be communicated to individual banks and Farm Credit Associations to allow them to work within the policies.
3. Direct Cash Infusion: Pork producers continue to request a meaningful direct cash infusion to assist 1999 cash flows.
4. Humanitarian Gilt Lift: We continue to urge USDA to implement a meaningful “humanitarian gilt lift” of 200-250 pound gilts for Hurricane Mitch victims in Honduras, Nicaragua, the Dominican Republic and Mexico.
5. Reduce Canadian Live Hog Imports: USDA should work to reach an immediate resolution of the Quality Meats (Ontario) strike; “voluntary” participation in a U.S. hogs first slaughtered by U.S. packers; increase capacity utilization of Canadian slaughter plants; and U.S. government action to reduce/restrict access of Canadian slaughter hogs.
On Dec. 24, 1998, the USDA announced its initial assistance package, including an FSA loan guarantee program. According to Reifschneider, pork producers are reporting local FSA personnel do not expect to have the guaranteed loan program operational within a month. “For such a simple shift in programming, this is unacceptable to producers hanging on from day-to-day. These programming details must be communicated to field offices in hog producing states immediately to ensure that the initial relief effort reaches pork producers promptly.”
According to the letter, the University of Missouri estimates that pork producers have experienced operating losses exceeding $2.5 billion in 1998. “Unfortunately, this destruction of equity continues today,” said Reifschneider. “While the December 29th Hog and Pigs Report offers some promise of a modest market recovery, immediate action must be taken to address the liquidity crisis still gripping pork producers. Inaction will assure that many pork producers will not see higher prices.”
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