March 11th,2021
Continuing from two weeks ago. I touched on two of the three big food production costs that are a result of our social values; labour in the form of a decent wage, living conditions, and safe working conditions and environment in an attempt not to destroy the planet in one fell swoop. The third big expense that much of our outside production does not have is food safety.
On the food safety side, we have a very aggressive Canadian food safety campaign called “The Safe Food For Canadians Act” that puts huge pressure, responsibility, and cost on the farmers in the form of mostly record keeping (which, by the way, doesn’t necessarily do a darn thing for food safety). Meanwhile, more than 99% of all food recalls in Canada are on imported products. Sure we can demand this or that accreditation at the border but we really have no way of being sure everything is on the up and up. Of those 99% of recalls, many are a result of pesticide contamination and do no good because by the time they are flagged they have been consumed by us. My argument (and fear) is that the Safe Food For Canadians Act does the opposite of what it claims. It puts Canadian farmers at a further financial disadvantage, slowly reducing the overall production of food in Canada, increasing the amount of imported food. The final result; less safe food for Canadians!!!
March 1, 2021
Of course, our imperfect political system, while one of the best in the world I think you would agree, depends on 4-5 year terms and popular vote. Most Canadians are mostly focused on consumerism (we’re all guilty to some degree) which makes the lowest price the law; anything that goes against that is very unpopular. Farmers and their supporters only make up a small percentage of the vote (farmers themselves are less than 2%) so without major social change, I don’t see priorities of the government changing any time soon. The food security and sovereignty threat may be our strongest argument and best hope for affecting change but a short sighted political system works against that. My guess is that we would, in fact, have to give up very little of our Walmart spending to have food security because the economic boost of producing food here in NS would make up for most of the food price increase that would be required to produce food that meets our social ideals. The margins of agriculture are extremely tight; well under 10%. The cost at the grocery store is a minimum of double what the farmer gets for fresh, unprocessed products and many times more than the farmer gets for processed foods. If the overall price of food were to go up by 3-5% and it all went to agriculture it would increase profitability on the farm multiple times. But; how to make that happen…?…. It’s very interesting to hear that the Nova Scotia economy did a wee bit better in 2021 with Covid than in 2019. Tourism is a big deal for Nova Scotia and tourism from outside was nearly non-existent so do we actually spend more tourism dollars outside the province than we bring in? Would the same thing happen if we stopped sending our food money outside of our borders and paid a little more for food produced in line with our social standards in our back yards?
Even if you as a consumer are buying locally the price you pay is suppressed to quite a degree by the lower price of imported products. If price, quality and availability of local product were completely identical to all imported products one could very reasonably assume that anyone and everyone would buy 100% local. As soon as the local cost, quality (although the closer to the farm it is sold, generally, the better the quality), or availability/ convenience tips in the favour of outside product a certain number of people will “jump” back to the outside product. Every one of us has a jumping point no matter how committed we are to our local community. Fair enough, there are limits to what is worth the expense; hence, no local pineapple….yet ( global warming might fix that problem). But I think you can see the mechanism that links the price we get here to the price of the imported product. The exact same mechanism applies to the price spread between conventional and organic. As the spread increases, more people jump back to conventional and sales volume goes down. An example that would fit well in a high school economics course.
Our loss of scale and related efficiencies also contributes to our struggle to compete with outside product. If we were able to scale back up to previous production levels of 100 years ago I think we would become stronger competitors. Unfortunately, it is a "chicken and egg scenario”. We need the economies of scale to increase our market share but we need to increase our market share in order to realize those economies.
To top it all off the produce industry in the Maritimes has to deal with a peculiar situation that often further depresses the price of food. As I am sure many of you are aware, produce prices traditionally start high at the beginning of the season and drop once supply meets demand. It allows farmers to make a better profit upfront and also pays for any extra cost associated with helping the crop to be early. Ontario and Quebec grow many times more produce than the Maritimes and on top of that their season is a week or two ahead of us. There are two things that result from this. The first is that just before a major crop starts locally the big box stores will put a loss leader sale on and destroy the early high price (or alternatively reduce the amount the local growers can sell if they choose not to match that price) right from day one. It’s a very frustrating and disheartening feeling for us as growers. The other thing that happens is that if there is an oversupply in the Ontario/ Quebec market, wholesalers will ship produce our way to reduce their oversupply in their own local market and keep prices from tanking. The problem is that these surplus products often get sold here at lower prices than they would have where they were grown and we will be left with lower wholesale prices here than in Ontario and Quebec. Even worse, we sometimes aren’t able to sell our products at all.
Now to top all of that off again! Almost all processing of fruit and vegetable crops in Nova Scotia has been systematically bought out and closed down over the last thirty years. If we had processing capacity we could conceivably harvest and sell the surplus to a processor and at least cover most of our expenses. The fact that we don’t have that buffer means that when we plant crops we have to be very careful not to plant too much. A beautiful crop that we can’t sell can leave us in a worse financial situation than a mediocre crop that all sells. When we are cautious about the number of acres we plant we often end up running short. That further erodes our markets because our supply becomes less dependable……..I’m giving myself a headache…..so I’ll stop.
Looking to the future, there are a number of farms and businesses that are working toward bringing some of that processing ability back to this province. Elmridge Farm is one of them and I will describe that project next time.
Enjoy the beautiful weather! and……
Keep eating your veggies.
Greg
On the food safety side, we have a very aggressive Canadian food safety campaign called “The Safe Food For Canadians Act” that puts huge pressure, responsibility, and cost on the farmers in the form of mostly record keeping (which, by the way, doesn’t necessarily do a darn thing for food safety). Meanwhile, more than 99% of all food recalls in Canada are on imported products. Sure we can demand this or that accreditation at the border but we really have no way of being sure everything is on the up and up. Of those 99% of recalls, many are a result of pesticide contamination and do no good because by the time they are flagged they have been consumed by us. My argument (and fear) is that the Safe Food For Canadians Act does the opposite of what it claims. It puts Canadian farmers at a further financial disadvantage, slowly reducing the overall production of food in Canada, increasing the amount of imported food. The final result; less safe food for Canadians!!!
March 1, 2021
Of course, our imperfect political system, while one of the best in the world I think you would agree, depends on 4-5 year terms and popular vote. Most Canadians are mostly focused on consumerism (we’re all guilty to some degree) which makes the lowest price the law; anything that goes against that is very unpopular. Farmers and their supporters only make up a small percentage of the vote (farmers themselves are less than 2%) so without major social change, I don’t see priorities of the government changing any time soon. The food security and sovereignty threat may be our strongest argument and best hope for affecting change but a short sighted political system works against that. My guess is that we would, in fact, have to give up very little of our Walmart spending to have food security because the economic boost of producing food here in NS would make up for most of the food price increase that would be required to produce food that meets our social ideals. The margins of agriculture are extremely tight; well under 10%. The cost at the grocery store is a minimum of double what the farmer gets for fresh, unprocessed products and many times more than the farmer gets for processed foods. If the overall price of food were to go up by 3-5% and it all went to agriculture it would increase profitability on the farm multiple times. But; how to make that happen…?…. It’s very interesting to hear that the Nova Scotia economy did a wee bit better in 2021 with Covid than in 2019. Tourism is a big deal for Nova Scotia and tourism from outside was nearly non-existent so do we actually spend more tourism dollars outside the province than we bring in? Would the same thing happen if we stopped sending our food money outside of our borders and paid a little more for food produced in line with our social standards in our back yards?
Even if you as a consumer are buying locally the price you pay is suppressed to quite a degree by the lower price of imported products. If price, quality and availability of local product were completely identical to all imported products one could very reasonably assume that anyone and everyone would buy 100% local. As soon as the local cost, quality (although the closer to the farm it is sold, generally, the better the quality), or availability/ convenience tips in the favour of outside product a certain number of people will “jump” back to the outside product. Every one of us has a jumping point no matter how committed we are to our local community. Fair enough, there are limits to what is worth the expense; hence, no local pineapple….yet ( global warming might fix that problem). But I think you can see the mechanism that links the price we get here to the price of the imported product. The exact same mechanism applies to the price spread between conventional and organic. As the spread increases, more people jump back to conventional and sales volume goes down. An example that would fit well in a high school economics course.
Our loss of scale and related efficiencies also contributes to our struggle to compete with outside product. If we were able to scale back up to previous production levels of 100 years ago I think we would become stronger competitors. Unfortunately, it is a "chicken and egg scenario”. We need the economies of scale to increase our market share but we need to increase our market share in order to realize those economies.
To top it all off the produce industry in the Maritimes has to deal with a peculiar situation that often further depresses the price of food. As I am sure many of you are aware, produce prices traditionally start high at the beginning of the season and drop once supply meets demand. It allows farmers to make a better profit upfront and also pays for any extra cost associated with helping the crop to be early. Ontario and Quebec grow many times more produce than the Maritimes and on top of that their season is a week or two ahead of us. There are two things that result from this. The first is that just before a major crop starts locally the big box stores will put a loss leader sale on and destroy the early high price (or alternatively reduce the amount the local growers can sell if they choose not to match that price) right from day one. It’s a very frustrating and disheartening feeling for us as growers. The other thing that happens is that if there is an oversupply in the Ontario/ Quebec market, wholesalers will ship produce our way to reduce their oversupply in their own local market and keep prices from tanking. The problem is that these surplus products often get sold here at lower prices than they would have where they were grown and we will be left with lower wholesale prices here than in Ontario and Quebec. Even worse, we sometimes aren’t able to sell our products at all.
Now to top all of that off again! Almost all processing of fruit and vegetable crops in Nova Scotia has been systematically bought out and closed down over the last thirty years. If we had processing capacity we could conceivably harvest and sell the surplus to a processor and at least cover most of our expenses. The fact that we don’t have that buffer means that when we plant crops we have to be very careful not to plant too much. A beautiful crop that we can’t sell can leave us in a worse financial situation than a mediocre crop that all sells. When we are cautious about the number of acres we plant we often end up running short. That further erodes our markets because our supply becomes less dependable……..I’m giving myself a headache…..so I’ll stop.
Looking to the future, there are a number of farms and businesses that are working toward bringing some of that processing ability back to this province. Elmridge Farm is one of them and I will describe that project next time.
Enjoy the beautiful weather! and……
Keep eating your veggies.
Greg
