Supply chain pressures putting the squeeze on growers

Supply chain pressures and rising costs are the latest pandemic-related impacts affecting fruit and vegetable growers. And while we’re by far not the only sector of the provincial or the national economy dealing with these challenges, as growers we are among the least able to respond to them.

 

We all know that our industry is one of price takers. In today’s global marketplace, we have very little if any opportunity to pass increased costs at that farm level on to consumers. That means that every price increase to our businesses makes it that much harder for growers to stay profitable or competitive. 

 

Consumers are seeing higher prices at the grocery store, but those higher prices don’t translate into more revenue for growers - however, we are seeing record profits in the grocer retail sector.

 

COVID-19 has created health, economic and logistical upheaval around the world, resulting in crippling port congestion, skyrocketing shipping costs, product and service shortages, delivery delays and lack of personnel. 

 

This has an even more significant impact in an industry such as produce that deals with perishable products. While delayed delivery of a container with furniture, for example, is an inconvenience, the furniture will still be sellable when it is finally delivered to its buyer. 

 

With produce, it’s a different story. Any delays in delivery impact the quality of fruits and vegetables, meaning they’re less appealing to consumers, have a shorter shelf life and will more likely end up as food waste instead of being eaten. 

 

A car part shortage is inconvenient when you’re waiting to buy a new vehicle but input shortages in horticulture have a more dramatic impact. When the fresh produce supply chain has trouble getting anything from fertilizer, crop protection products and greenhouse building materials to skids, cardboard and packaging, it impacts not just grower profitability but also ultimately what consumers see in the grocery store - and our food security. 

 

As costs for everything continue to increase, so does the price of produce, making it harder for Canadians to afford healthy food choices. And it’s not just the pandemic that has been contributing to price increases. There are also impacts created by government policy. 

 

For example, the federal carbon tax increases the cost of doing business for everyone, and while our sector is supportive of responsible and sustainable food production, we also need time and support to transition to new technologies and invest in innovation. 

 

Here in Ontario, the recently announced raise in minimum wage levels to $15/hour on January 1, 2022 is yet one more price increase that growers will have to try to absorb. The short notice between announcement and implementation doesn’t leave a lot of time for adjustment, and the nature of unexpected announcements gives growers little stability or predictability in being able to manage their costs. 

 

The minimum wage hike comes on top of significantly higher labour costs that growers have already borne since the onset of the COVID-19 pandemic - both to ensure Canadians continue to have access to local food and in hopes of better times ahead. 

 

That included costs for everything from hotel quarantines and PPE to inconsistent regulations from local public health units. Increased distancing and fewer international workers able to come to Canada impacted productivity and workflows, and in extreme cases, resulted in crops that simply did not get harvested. 

 

It’s also important to note that although pandemic-related labour challenges continue for growers, the federal government has ended all related support programs that were helping us absorb some of the losses during these challenging times. 

 

We are seeing fruit and vegetable growers being put in a position of unprofitability and unsustainability at a time when domestic food production should be enhanced, and food sovereignty should be a national security issue.

 

It’s becoming clear that there are more turbulent times ahead for edible horticulture, and we’ve been working to bring the depth and breadth of the challenges to the attention of the provincial government. 

 

As I write this, we’ve just had a meeting with Ontario Minister of Agriculture, Food and Rural Affairs, Lisa Thompson, to brief her on how our industry is currently being impacted. She is hearing similar concerns from across the agriculture sector - it’s not just horticulture that is feeling the pinch.

 

 It was a positive first meeting on the issue and we’ve agreed to stay in close communication with OMAFRA and the Minister’s Office as this situation continues to unfold. 

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Publish date: 
Wednesday, November 24, 2021

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