Editorial: November 2012

Cost Has Value
Kristy Nudds
Thursday, 18 October 2012

The argument that supply management costs Canadians more at the grocery store once again has become news fodder, and, as usual, the focus on cost differences is flawed and detracts from the bigger issue at hand.

The Canadian Broadcasting Corp. (CBC) has released details of an investigation it conducted into cheese smuggling across the U.S./Canada border in Niagara Falls, Ont. It reported that the Niagara Regional Police service is investigating several officers who are accused of using their police vehicles to bring mozzarella cheese from the U.S. into Canada, and offering it at reduced cost to Canadian pizzeria owners.

The cost of cheese in Canada has long been a contentious issue for the pizza and restaurant industry, and has in part led the Canadian Restaurant and Foodservices Association to appeal to the Standing Committee on Agriculture and Agri-Food that supply management in the poultry and dairy industries increases prices for its members, stifles innovation and creates unfair competition among buyers.

Coincidentally, several days prior to the CBC report, the British Columbia Egg Marketing Board (BCEMB) released a new consumer campaign called “Eggonomics” to try to address the issue of price differences between U.S. and Canadian eggs at the grocery store. The BCEMB says that cross-border egg shopping costs its industry upwards of $3 million a year. The organization has launched a website – www.eggonomics.ca – where it gives “six reasons to take U.S. eggs off your shopping list.” These include the negative impact on B.C.’s GDP, the loss of economic support in B.C. communities, quality and freshness concerns, and the impact on infrastructure (for example, the concern that spending outside of Canada will leave less money available for social programs such as health care).

The Eggonomics campaign speaks to Canadian consumers’ values, a strategy that Charlie Arnot, CEO of the U.S.-based Center for Food Integrity, has been championing, most recently at the North American forum on Sustainable Animal Agriculture held in Mississauga, Ont. Rather than relying on explanations of economics and science, he feels, animal agriculture needs to gain consumer confidence and trust by communicating values that farmers and consumers share, such as producing and eating high-quality products that sustain farming and rural communities – essentially, the benefits agricultural production provides to society as a whole, not just to farmers’ bottom lines.

Of course, immediately after the CBC report and the release of the BCEMB Eggonomics campaign, national newspapers such as the Vancouver Sun and the National Post ran columns criticizing supply management, saying it costs consumers too much money and that if tariffs were eliminated and U.S. product was allowed in, everybody would win: costs would go down, and Canadian farmers could suddenly become more competitive and innovative.

What’s missing from their collective argument is not only the loss of revenue to the Canadian agricultural industry, but also its sustainability. As an example, take what is happening in the beef and pork industries in Canada right now. Both are at a tipping point and predictions are that they will continue to shrink. This has a spill-over economic effect on communities, and although we will see more U.S. beef and pork products in the grocery store, it’s doubtful consumers will reap any price benefit. They certainly didn’t during the BSE crisis nine years ago.

Without control over or support of domestic supply, livestock industries have two other choices: shrink and be eliminated altogether by foreign competition, or continue in chaos and hope for the best. Where is the value in that?

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