Ethanol hurts hog industry

GUELPH — Federal policy that subsidizes grain-based ethanol production is hurting the hog industry, says a recent study by the George Morris Centre.

Government subsidies for ethanol have greatly increased demand for Canadian feed grains, the study says. As a result, Canadian hog farmers are now paying more for feed grains than their American competitors, and no longer have a competitive advantage.

The recent government recovery package for hog farmers, which includes loans and marketing money, is a good one, the study admits. But it says the ethanol subsidies almost cancel out the pork bailout. "Rarely have two elements of Canadian public policy been so profoundly at odds with one another," the report observes.The Morris Centre suggests that if the government does not prioritize pork over ethanol subsidies "it will logically result in (pork’s) demise."

Canada’s ethanol industry has seen large growth as the federal government has required all gasoline to contain at least 5% ethanol.