Abstract

Canadian hog producers are eligible for a federal/provincial hog stabilization program which, under certain conditions, makes deficiency payments to producers enrolled in the program. Currently, producers pay premiums of approximately one-third of the cost of the program, whereas federal and provincial authorities share the remaining two-thirds of the cost. There are no direct subsidies to pork processors. In 1984, U.S. hog producers alleged that the Canadian stabilization program was an unfair production subsidy resulting in larger Canadian hog and pork exports that caused serious economic hardship for U.S. hog producers. The consequent trade actions against Canadian exports have entailed a countervailing duty on hog exports applied sporadically over the same time period. This paper provides a summary of the Canadian hog stabilization program and an overview of the economic and legal arguments made in the U.S. countervailing duty case involving Canadian hog and pork exports.