A recent report from the National Farmers Union is drawing parallels between a lack of grocery chain competition and a dwindling number of grain buyers in Canada.
James Hannay is a policy analyst for the NFU. He explains that while the few main grocery giants continue to profit off increasing food costs, the farmers producing that food aren’t seeing any of that extra revenue come back to them.
“Prices for farmers can be kept low for the same reasons. We see two meat packing companies in Canada dominating the market. They can keep prices low for livestock producers. We have four or five major grain traders in Canada, and they can use that market power to keep prices low for grain and cereal farmers.”
For example, Hannay says the price of bread has risen over $3.00 in 20 years in the grocery store but hasn’t changed much at all at the elevator in over thirty years.
Hannay says if this problem isn’t resolved, the big picture impacts could be detrimental to the nation’s food security.
“(For consumers, we could see) Increasing unaffordability of food for Canadians. We’ve seen a massive increase in the last five or six years. For farmers, you’ll see even more farmers starting to…sell of their farms because it’s not tenable business for them anymore. With increasing input prices and stagnating product prices, not many farmers will be able to adapt to that.”
However, he says the story shifts when you look at supply-managed products. He explains that the prices of cheese, butter, and milk have only fluctuated about 50 to 70 cents in the last 20 years, with over 70 per cent of the retail price of those items going to farmers.
“Supply management is ensuring that Canadian consumers have predictable prices, predictable supply for dairy, chicken, eggs, and turkey, and farmers farming those products have a fair return for their labour.”
The NFU makes several recommendations in the report, such as a profit cap on big retail grocers, exploring public grocery options, and the return of collective marketing boards.
