Thank you, Mr. Chair.
Hello. My name is Mary Robinson. I am from Prince Edward Island. I am a producer on Prince Edward Island and the president of the Canadian Federation of Agriculture.
The CFA is Canada's largest general farm organization. We represent over 190,000 farmers and farm families across this country. We and they are the heart of the Canadian agri-food system, generating just under $135 billion of Canada's GDP.
As you know, food inflation is outpacing all other commodities, and we are seeing these price increases reflected across the board in sectors such as fresh fruit, vegetables, dairy and eggs, to name just a few. This is illustrative of the fact that farmers have seen their bottom line costs increase tremendously over the past few years, with a sharp rise in expenses through 2021 and 2022.
The increased costs of production in the ag sector are being driven by several factors, including critical inputs such as fuel and fertilizer, which have seen drastic price increases over the past year. According to Farm Credit Canada, “fuel costs [have] increased more than 80% since the first quarter of 2019” and the average fertilizer and feed costs have very nearly doubled. In addition, machinery, pesticide and labour costs have also increased substantially over the same period.
Farmers have no lower-cost alternatives to turn to for these inputs and their absence has dramatic implications for Canada's agricultural productivity and Canada's food security. For most farmers across Canada, 2022 was the most expensive crop they have ever put in the ground. As a result, many farmers are required to make tough decisions around whether to delay investments in their operation that would otherwise make them more efficient and environmentally sustainable, because they simply do not have the margins.
The bottom line is that inflation represents several challenges for Canadian producers, who are price-takers in global markets and subject to weather- and climate-related risks that are outside our control.
There are some immediate steps that can be taken to reduce potential short-term impacts on Canadian food production.
First, our members are very encouraged to see the progress of Bill C-234, which would exempt from the federal carbon price natural gas and propane used on farms for drying grain and heating and cooling barns in backstop provinces. We are thrilled that this is on its way to third reading in the House of Commons. It holds the potential to remove one more cost that farmers shouldn't have to bear and cannot pass along.
Second, according to Stats Canada, the federal government collected $34 million in tariff income on fertilizer imported into Canada in 2022. We feel that revenue from these tariffs should be redirected into programming that helps to alleviate some of the impacts of rising costs—for example, fertilizer and fuel—and helps to build resilience in the ag sector.
Finally, in July 2021, federal, provincial and territorial—FPT—ministers called for an industry-led process to improve transparency, predictability and respect for the principles of fair dealing within the supplier-retailer relationship. Following this announcement, a steering committee comprised of individuals from 10 key stakeholder groups, including the Canadian Federation of Agriculture, was formed to facilitate and develop an industry-led grocer code of conduct.
The objective of the code of conduct is to enable a thriving industry; promote trust, fair dealing and collaboration throughout the value chain; increase commercial certainty; and develop an effective and equitable dispute resolution process. While not explicitly targeting food inflation, we do believe that it will help to improve supply chain dynamics, particularly where one link in the supply chain is unduly shouldering the costs and risks of inflationary pressures.
We were pleased to see the minister's positive reaction to the most recent progress report of the committee earlier this year and look forward to the government's continued support for this initiative as it approaches implementation.
Thank you. I'll be pleased to answer any questions you may have.