Thank you, Mr. Chair.
I'm very pleased to be back in front of the committee today. I'm seeing some very familiar faces.
For those of you who do not know me, as the chair mentioned in his opening remarks, I am Keith Currie and I am the president of the Canadian Federation of Agriculture. We represent 190,000 farmers and farm families from coast to coast to coast here in Canada. I'm also joined online by my executive director at CFA, Scott Ross, who will answer all the hard questions for you today.
We've all experienced, in recent years, food inflation outpacing an already high inflationary pressure on the cost of living. While the rate of food inflation has declined over the past year, it's understandably a topic that is of great concern to all Canadians.
As part of my remarks here today, I want to cover off what I believe are some misperceptions when it comes to this topic.
The first one is this: As the price of food increases, so do farmers' profits. In fact, it costs a lot more to produce the food we eat today than it did before the pandemic. For example, look at the change in price for many of our farm inputs out there. Whether we're talking about machinery, fuel, fertilizer, livestock or livestock feed, the prices farmers pay have increased nearly 40% between 2019 and today. While farm incomes have also increased during this period according to the most recent Statistics Canada numbers, growth in expenses outpaces the rise in farm cash receipts. While we are starting to see a softening of the commodity prices in the market, the price of farm inputs is still staying at a high level.
Misperception number two is that farm gate prices drive retail prices. A recent study conducted by the Agriculture Producers Association of Saskatchewan revealed that underlying commodity does not account for the entire price increase of the final food product. More often than not, it plays a minor role, with the farm share of retail prices for the products sampled averaging less than a quarter of the value of the final product.
While I would stress that the evidence is quite clear that farm gate prices play a minor role in retail price increases, there are some immediate steps that can be taken to reduce the rising costs involved in Canadian food production.
First, we need time-limited and targeted exemptions for on-farm use of natural gas and propane, which we were trying to accomplish through Bill C-234. These exemptions must be available not just for grain drying but also for the heating and cooling of barns, greenhouses and other production facilities. Based on our survey of the impact of Canada's carbon tax on livestock, crop and greenhouse farms across Canada, we were seeing the carbon tax account for up to 40% of total energy bills in some sectors.
Second, we've put forward a number of recommendations in our budget submission of 2024—this year—that would help drive down the cost of production and improve supply chain dynamics in the agriculture sector. For example, we're calling on the government to consult on and develop a critical farm input strategy, similar to the critical minerals strategy, in order to ensure Canadian producers have a long-term, stable supply of critical farm inputs to produce high-quality agriculture and agri-food products.
Finally, we need to move forward with the implementation of an industry-led grocery sector code of conduct. The objective of the code of conduct is to enable a thriving industry that promotes trust, fair dealing and collaboration throughout the value chain, increases commercial certainty and develops an effective and equitable dispute resolution process. While not targeting food inflation, it will help improve supply chain dynamics. Industry has committed considerable time and resources to the development of an industry-led code that works for all parties. We have greatly appreciated the attention and support of FPT governments throughout the development of the code and hope to see that support continue in getting this over the line.
I'll be pleased to answer any questions you may have.
Of note, this Friday—February 9—is “Food Freedom Day”. That is the day when the average Canadian has made enough income to pay for their groceries for the entire year.
Thank you.