The truth about the cost of Ontario food
Guelph Mercury, August 01, 2008
The global food crisis is starting to hit home. Even here in Ontario where a strong farming sector produces an abundance of top quality food and exports much of it to other countries, higher food prices are becoming a fact of life.
The growth of renewable fuels — especially ethanol whose main ingredient is corn — and the concept of growing plants for fuel instead of food are being pegged as the number 1 reason behind the rising food costs. This corn, the argument goes, is corn that should be going to feed people and not cars.
Only months ago, biofuels were touted as a “green” solution to our environmental problems and essential to lessening our dependence on oil. Farmers were being praised for their role in this developing industry. Now, fingers are being pointed at those same farmers as the greedy cause of the world food crisis and for the collective drain being put on our pocketbooks.
That’s hardly fair– and it’s hardly a complete picture.
In Canada, we enjoy some of the lowest food prices in the world, spending only about 10 per cent of our income on food.
On June 14, we marked Tax Freedom Day, the day we’ve earned enough money to pay all of our taxes for the year. By comparison, our 2008 Food Freedom Day was four months earlier on Feb. 7, meaning it takes us just 38 days from Jan. 1 to earn the needed income required to pay our yearly food expenses.
It’s true that prices for crops like grain, corn and soybeans are currently at highs that farmers haven’t seen in years. However, costs for fertilizer and fuel have more than doubled over last year. This means farmers have to pay more just to grow their crops and may be left with very little of the price increase in their pockets at the end of the growing season, especially when they’re also trying to repay debts from the last decade of crop prices so low they were unable to recover their cost of production.
On average, 80 per cent of the cost of food products is added after the farm gate. This means when the price of a loaf of bread goes up, it’s not just because grain costs more, but also because labour, processing and transportation costs have increased.
And there are other reasons why the cost of food is on the rise — all things that are beyond the control of farmers.
Australia, a major world food producer, has been struggling with prolonged drought, as have other parts of the world. Many years of low crop prices have contributed to a decrease in the number of farmers and in the volume of crops that are grown in various countries, including Canada. Consumption in China and India’s growing middle class is creating growing demand for food products.
But let’s get back to renewable fuels. Only 15 per cent of all the corn grown in Ontario goes into the production of ethanol and most of our corn crop is actually used primarily for animal feed and not human consumption.
It’s also important to remember that biofuels are still an emerging technology and although we’re using corn and soybeans as ingredients now, work is underway to use other sources such as corn stalks, wheat straw and other waste that we don’t currently make use of. Other new technologies also make it possible for farmers to grow more crops per acre of land than ever before.
Our oil dependence evolved gradually and I think our weaning process will evolve equally gradually.
It is unrealistic to assume that we will find the perfect solution to this problem without some trial and error along the way or without suffering through some added costs.
But at least the search is on and Canada is at its leading edge.
This editorial was first published in the Guelph Mercury on August 1 2008.