Ethanol undermines Canada hog farm rescue

Canada's rescue plan of the hog industry will fail to save it because the government continues to support ethanol production, the industry's rival for feed grain supplies, a report by an independent farm research centre said on Wednesday. The Canadian government said on Saturday it will pay some farmers to stop raising hogs and offer loans to help others restructure. Canada's hog industry is in crisis, with high feed prices, a buoyant Canadian dollar, fears about H1N1 flu and a U.S. food labelling law making pig farming unprofitable. A mandate from the Canadian government, starting next year, that oil companies must market fuel with 5 percent renewable content, has spurred rapid expansion of ethanol production. That's driving up prices of corn and feed wheat, from which ethanol is produced and which farmers feed to cattle and pigs. "Rarely have two elements of Canadian public policy been so profoundly at odds with one another," the report from the George Morris Centre said. "...There is something singularly perverse about giving false hope and setting an industry up to fail."...Reuters