The federal government is offering a $75-million buyout fund to help farmers get out of the struggling pork industry, federal Agriculture Minister Gerry Ritz said Saturday.

Hog producers say their operations have been hit by high feed prices, a strong Canadian dollar, strict new country-of-origin labelling laws in the United States, as well as the swine flu crisis. (Charlie Neibergall/Associated Press)

Canadian hog producers have been losing hundreds of thousands of dollars, thanks to a perfect storm of conditions — including H1N1, a stronger Canadian dollar and new American labelling laws.

Speaking at a research farm in rural Manitoba Saturday, Ritz said some hog operations are not viable and those farmers need help.

"We have to face the reality that some producers will leave the industry and we need to reduce our current over-supply," he said.

He also said those who stay in the industry will be able to apply for new long-term loans so they can restructure.

Ritz said the Canadian pork industry will become profitable again but it needs help weathering the current recession.

Pork producers in Canada had been asking for $800 million from the federal government to help the ailing industry.

"Is it what we wanted? Of course, straight cash is always nicer without any strings attached, but the reality is that wasn't going to happen," said Jurgen Preugschas, president of the Canadian Pork Council.

The Liberals also criticized Ottawa's response, calling it "too little and too late." Liberal agriculture critic Wayne Easter said in a statement that loans do little for hundreds of farmers who are already in debt.

Tough decisions ahead

Sometime this month, Manitoba pork producer Rick Vaags will have to make a tough, emotional decision whether to shut down his family hog farm of 45 years.

He says he's just losing too much money.

"We're living off equity right now," Vaags told CBC News in an interview from his farm in Dugald. "The bottom line right now is, we're losing 40 bucks a hog right now. That's been going on for quite a while, and we can't keep doing that."

Under the plan, farmers will have to bid from the available buyout money, so it is unclear how much cash each individual producer will get.

"Those numbers will be worked out on a case-by-case basis," Ritz said.

The government is also launching a new $17-million marketing fund to help boost sales for Canadian pork worldwide.

With files from Mychaylo Prystupa and the Canadian Press