The premium for pork producers to pay in order to profit from Farm Income Stabilization Insurance in Quebec is expected to be reduced to $5.64 per animal, a $17 reduction. That's a big portion of the shock felt when the cost of production model was revised.
The new model will not be revealed until late January 2014, with hopes of making as smooth a transition as possible from the current model. The rates are in effect for the next five years.
The cost of production was determined after 79 farms were evaluated. The report was filed mid-November last year, as per the policy of La Financière Agricole du Québec to review the insurance program every five years. Costs of production went up from $179.77 in 2007 to an average of $229 in 2012.
The new premium was officially approved by the board of directors of la Financière last Dec. 18.
David Boissonneault, the president of the éleveurs de porcs du Québec, said in an interview to La Terre de Chez Nous that he's looking to create a stable environment to enable a smooth transition. Although the premium decrease is expected to go to $5.64 according to the calculations from the re-evaluation, Boissoneault did not confirm final numbers when speaking to the media.
"We've seen difficult years," said Boissoneault. "The cost of production is a key element. We don't have a choice."
Lowering the rate to $5.64 would translate to approximately $2 per pork finisher and $4 per pork farrow-to-finisher. With feed costs decreasing, so too are premiums and there is hope that ASRA will not have to make any payments out in 2014. At the same time, Boissonneault cautions that factors could change and they need to be prepared for that.
The focus of the éleveurs de porcs du Québec will now be to make sure that all enterprises and associated partners have a good understanding of the new model and any potential issues for the sector.
