Alberta is spending $356 million over the next two years to bail out its beleaguered livestock farmers, as long as they help prove that the province's products are disease-free.

Agriculture Minister George Groeneveld said the province's livestock producers must start doing things 'radically different.' (CBC)

"Albertans want a competitive and sustainable livestock industry, but this will not happen until we start doing things radically different," said Agriculture and Rural Development Minister George Groeneveld on Thursday in Edmonton when he announced the new funding.

"The industry needs to regain its competitive advantage and although these changes will not be easy, they are necessary."

Producers will receive $150 million immediately with no strings attached. To qualify for a second round of $150 million in January, they must verify the age and country of origin of their stock.

Groeneveld said the verifications are necessary to placate foreign buyers who still fear the possibility animals carry bovine spongiform encephalopathy, commonly known as mad cow disease.

"Producers who are unable or unwilling to transform their business by meeting these conditions may need to consider ways to exit the industry," he said.

Alberta livestock producers are getting help from a provincial bailout and the creation of a new livestock and meat agency. (Canadian Press)

The province is also spending $56 million this year to create the Alberta Livestock and Meat Agency, which will report directly to the agriculture ministry.

The new agency will focus on "redirecting resources to key priorities," and "refocus efforts to achieve a sustainable and competitive livestock industry," a provincial news release said Thursday.

Alberta beef producers have been hurt by the crisis created by BSE and the high Canadian dollar.

Meanwhile, hog producers have seen prices plummet to pennies per pound as they operate with high feed and fuel costs.

In April, the federal government announced it would pay producers for an unprecedented cull of 150,000 breeding hogs.