Good afternoon, Mr. Chair and members of the agriculture committee. Thank you for the opportunity to join you today and speak on the issue of food inflation.
My name is Rebecca Lee, and I am the executive director of the Fruit and Vegetable Growers of Canada. Our growers are involved in the production of over 120 different types of crop, on over 14,000 farms, with farm cash receipts of $5.7 billion in 2020.
FVGC recognizes the importance of this issue and thanks the committee for undertaking this critical study. According to Statistics Canada, fresh fruit prices were up 9.6% in March 2022 compared with the same month last year. The latest food price report, released last Monday, estimates vegetable prices will increase by another 6% to 8% next year. As a result, more than 26% of Canadians have reduced their consumption of fruits and vegetables in the past year due to price increases. Even before the pandemic, close to 80% of Canadians were not eating enough fruits and vegetables, as recommended by Canada's food guide, resulting in an economic burden calculated then at $4.6 billion.
As you endeavour to understand the cause of rising costs, I am here to talk about the situation of many of our growers across the country.
Concerned about the rising costs our growers have been dealing with, FVGC recently surveyed our members to get a picture of the situation. This reaffirmed that across Canada, growers are struggling. Overall, our growers report a 40% increase in input costs. Fertilizer leads the way, with a 72% increase since 2020. Fuel has gone up 65%, while labour has increased by 20% and shipping by 42%. Our growers are generally unable to recoup their costs through the sale of their products: 77% of respondents have not been able to raise their selling price in line with their increased costs, and 44% are selling at a loss. Meanwhile, many growers are still working to recover costs associated with the pandemic, numerous climate disasters, and devastating pests and diseases.
They also continue to be burdened by costs associated with increasing retailer fees, multiple labour and food safety audits, and new requirements to demonstrate sustainability. We fully support a strong integrity regime to ensure our food is safe and sustainably grown and that our workers are being treated fairly; however, it is the layering and often duplication of these audits that are burdensome to growers. Government is adding to the pressure by introducing carbon disincentives and other environmental goals to meet international agreements, without balancing them with adequate and agile funds to support change.
As a result—going back to our survey—73% of our growers have had to delay buying equipment or investing in their operations, including exploring new environmental practices, because they simply can't afford to invest.
Furthermore, produce growers are very susceptible to production risks, which can be extremely high due to the volatility of prices, high dependence on labour and the perishability of produce. Quality loss can have a significant impact on the price the producer receives. I'm sure many of you saw the CBC article last month about one of our growers, Richard Melvin of Nova Scotia, who reported that 40% of his 36 hectares of cauliflower gets ploughed back into the ground each year. Like many growers, they can't afford to harvest, box and transport produce that isn't being purchased, especially for vegetables like cauliflower, which can spoil in two weeks.
Unfortunately, AgriStability and AgriInsurance, the two main tenants of the business risk management program, do not account for significant product quality variability. Therefore, most of our growers do not fit into either program, leaving a large number of them without an adequate safety net.
On the one hand, high prices at the grocery level are limiting consumers' access to healthy food. On the other, growers unable to cover production costs with the prices they obtain from their buyers are faced with the decision of whether or not to continue in the struggle to provide domestically produced fruits and vegetables. We cannot continue to take for granted the importance of having a strong domestic supply of healthy and nutritious fruits and vegetables.
Canada's fruit and vegetable growers believe in the need for sustainable agriculture—socially, environmentally and economically. Food production is an essential sector. Fundamentally, it should be considered a public good. Ensuring that risks, costs and fair earnings are spread throughout the supply chain is critical. A strong grocery sector code of conduct is a step in that direction. Government must look holistically at all policies through a food and agriculture lens to avoid unintended impacts. We also need stronger risk management supports for the horticulture sector.
Our sector has proven its resilience time and again. We firmly believe that given due recognition and adequate supports, our growers will be able to balance the bottom line with their ability to provide safe and nutritious fruits and vegetables to “fill half the plate”.
Once again, we are grateful the agriculture committee is studying food inflation.
We need to act swiftly and with determination to address these challenges to protect not only the economic viability of our fresh produce sector, but also Canada's food security and the long-term health of Canadians.
I look forward to your questions.