As farmers ponder their spring business plans, many are buoyed by the optimism that this could be a profitable year, one that will bring stability against difficulty in recent years. Yet amid this optimism, there is a far-reaching sense of anxiety among the general public over food prices. Many look for a direct connection between commodity and retail prices, but they don’t recognize the many points in between that play into the cost of food.
Canadian farm groups are encouraged that the G20 will consider agriculture as a top priority at its June meeting. Food issues should be top of mind at all major international summits, particularly in light of escalating world hunger and a ballooning population. Farmers hear over and over that production must rise by 70 per cent by 2050, according to UN reports. No strangers to adaptability, they are up to the task. However, proper infrastructure is required to do the job. By infrastructure, farmers mean responsive and practical policy programs, as well as logistical support networks.
Food prices do not “soar” without the upward pressure of input costs, such as seed, fertilizer, fuel, pesticides, equipment and other necessities expenses over which farmers have no control. Of course, weather conditions and market speculation also affect prices. Add to this complexity the fact that many groups have a share in our food dollar. Revenue is split across the agri-food “supply chain,” including farmers, agricultural suppliers, food processors, manufacturers, distributors, and retailers.
In contrast to other parts of the world, Canadian food prices are relatively stable. The Canadian Federation of Agriculture (CFA) highlights this point through its annual Food Freedom Day calculation. Food Freedom Day this year is Feb. 12, representing the calendar date by which the average Canadian will have earned enough to pay for the entire year’s grocery bill.
Food prices steady
The date is derived through a simple calculation comparing disposable income and food expenditures (including alcoholic beverages) during the previous year. It is a general look forward on food prices. In 2010, the average Canadian spent 11.9 per cent of personal disposable
income on food; roughly the same percentage from 2009. Looking back further, Canadian food prices have been steadily increasing over the past 30 years, but the amount returned to the farm gate has stayed relatively low for most products, particularly when costs of production are taken into account.
Food Freedom Day demonstrates the value of our food system to all Canadians. Agriculture provides eight per cent of our GDP and supports one in eight jobs – vital contributions for our rural communities. Making the choice to buy Canadian food has a powerful ripple effect, as these purchases represent far more than just food. They strengthen our homegrown agricultural capacity and benefit the country as a whole.
Our agriculture expertise is envied the world over, and Canadian farmers see obvious solutions for helping developing countries build their food production capacity. Sustenance farmers make up most of the population in the developing world. Better sharing of techniques, technology, and food storage guidelines would go a long way to reduce hunger, for example.
Moreover, when it comes to resolving hunger and poverty cycles, higher commodity prices have an important benefit: they are a source of income. The food price crisis would be more accurately viewed as a systemic lack of food accessibility and basic agricultural infrastructure, such as roads and irrigation. Higher prices help stimulate regional investment and profitability at the local level, thereby reducing overall poverty. With added stability, these farmers could then look at boosting production to meet growing demand.
The Canadian Federation of Agriculture, through its work at the international level and the National Food Strategy initiative here at home, is examining the intrinsically linked questions around food security, health, and sustainable farming. CFA encourages the Canadian government to work closely with farmers to devise productive and practical solutions that will help foster stability and prosperity in Canada and abroad.