Thank you, Mr. Chair.
Good morning, committee members.
Currently, five major retailers account for nearly three-quarters of sales in Quebec, leaving little room for other players. Regional chains have disappeared. The number of corporate stores is steadily increasing. Affiliated retailers are increasingly unable to prioritize local sourcing. There are now only 300 independent stores specializing in fruits and vegetables—what we call “fruiteries”—in all of Quebec. There were several thousand of them 25 years ago.
The number of farmers' markets grew during the pandemic, but about 15 of them have since closed, and the number of stalls specializing in fruits and vegetables is down by 12%. Major retailers have built centralized and integrated supply chains. As a result, all but a few products—including fruits and vegetables—are distributed through a centralized Montreal-based system.
Consider a market gardener from the Quebec City region, for instance. Twenty years ago, he would have had access to a regional distribution centre serving the eastern part of the province. Now, he has to shell out for transportation to deliver his produce to Montreal. From there, it's shipped—you guessed it—back to Quebec City. Not all market gardeners can afford to invest in a fleet of trucks for long-distance shipping.
Without satellite distribution centres, regional suppliers cannot grow and distribution channels cannot diversify.
The Association des producteurs maraîchers du Québec owns the Place des producteurs in Montreal. As business models have evolved, major industry players have built their own distribution centre to advance integration. The Place des producteurs has repositioned itself as the primary source of local produce for independent businesses. However, as their numbers continue to dwindle, the non-integrated supply chain model will face a highly uncertain future if nothing is done.
Market garden businesses operating in our part of Quebec are beginning to consolidate because of the enormous economic pressure they've faced in recent years.
Further to comments made during previous meetings, I believe it is worth reflecting on the trends that have resulted in the consolidation and integration of supply chains and limited diversification.
Meanwhile, government support for agriculture in Canada remains lower than in many comparable countries. The international average is around 2% of government spending, but Canada currently allocates less than 1%. Given the intensifying climate, economic and geopolitical risks, this shortfall is no longer acceptable.
By way of comparison, just a few days ago, the U.S. Department of Agriculture announced an investment of more than $1.5 billion for specialty crop producers to help them cope with rising input costs and market disruptions caused by foreign competitors engaging in unfair trade practices. We agree that unfair trade practices exist in North America.
You won't be surprised to learn that vegetable growers also face growing competition from foreign countries. They operate in an open market. Many other countries operate under less stringent environmental, social and governance standards than those applicable in Quebec, which creates an uneven playing field.
Our association surveyed Quebec consumers this spring and found that nearly 90% of them rely on their local farmers to achieve as much food self-sufficiency as possible. Furthermore, only 11% of them do not care about where their food comes from. Knowing this, last summer we analyzed retail store labels indicating the origin of fresh fruits and vegetables and found a high rate of error.
In conclusion, to better understand this issue, the government must examine the integrated structure of major retail grocers' supply chains and the impact this has on the diversity of suppliers. Similarly, supply chain concentration undermines the diversity of distribution channels, and thus the quality of competition and regional representation. This issue must be addressed in order to remedy the situation.
Finally, the Canadian government must provide more financial support to farmers facing global competition and address the issue of standards that aren't comparable.
Thank you for your attention.