Farmers are thinking a lot about costs and food prices are expected to rise

Among the best caretakers of the environment, the agricultural sector says food experts

News analysis

Canada’s agricultural sector is tackling surges in demand, rising costs and labor shortages, while also facing pressure to reduce carbon dioxide emissions.

“Inflation will be a problem,” Sylvain Charlevoix, a professor at Dalhousie University and senior director at the Institute for Agricultural Food Analysis, told The Epoch Times.

Prices of all kinds of agricultural products, such as corn and soybeans, are skyrocketing.The· Bloomberg Agricultural Spot IndexMeasuring agricultural price fluctuations rose by more than 20% in 2021, the highest level since 2013.

Epoch Times Photo

The· 2021 Canada Food Price Report Food prices are projected to rise by a total of 3-5% this year, which is enough to make Canadians feel it in their wallets. Overall, Canada’s food inflation index has outstripped general inflation over the last two decades, according to the report.

“In fact, 5% is much higher than inflation, so Canadians actually have to spend more on food than they earn,” says Charlebois.

According to the Food Price Report, 5% means that the average Canadian family of four groceries will increase by about $ 700 a year.

Bakeries, meat and vegetables are expected to see the biggest price increases, according to the report.

In Canada Food price inflation More tame than the United States. Food purchased in stores increased by only 1.3% year-on-year in March. However, dairy and eggs were 2.4% and 11.4%, respectively, much higher due to what is known as the base year effect. It bounced off at a very low level a year ago at the beginning of the first blockade.

If a projected 3-5% increase in food prices occurs in 2021, food price inflation will rise significantly from the latest 1.3%.

Central banks in Canada and the United States tend to look beyond the effects of the base year and predict that total inflation will remain around 2%.

Bank of Canada April Business outlook survey More than half of the companies surveyed expected higher prices for products and services they purchased, and reported that commodity-related prices such as agricultural products and fuels were the main cause of higher costs.

On the plus side, the strong Canadian dollar (currently around US $ 0.81) is the highest since the summer of 2017, helping to keep food import costs down.

Good steward

Increasing demand for their products benefits Canadian farmers, but Charlebois Commons House Standing Committee on Agriculture and Agricultural Foods On April 29, he said the carbon tax would penalize them because importers do not face the same tax and therefore have a great competitive advantage.

“Price-taking economics puts farmers in a strange position when it comes to carbon taxes,” Charles Bois told The Epoch Times. Most farmers are price takers, which means they can’t charge any more for their products.

In February 2021 news releaseThe Canadian Federation of Independent Businesses (CFIB) averaged nearly $ 20 per ton from April 1, 2019 to March 31, 2020, in the first year the federal carbon tax was applied to farmers. He said it cost $ 14,000.plans Rise to $ 170 per ton by 2030 According to Charles Boa, this is a game changer.

Virginia LabbyA senior policy analyst at CFIB Agribusiness told the Commission that the majority of upland crop farmers could pass on less than 10% of the federal carbon tax to their customers, which would disproportionately hurt SMEs.

Grain drying is one of the increasingly expensive tasks due to carbon taxes. There is no practical and efficient way to do it other than using a fossil fuel-powered dryer.

Charles Bois said much more was needed to help farmers than the 2021 budget promised.

“In fact, I’ve always seen farmers as one of the best environmental managers in the world. They make money from the land, so they take care of the land as much as possible,” he said. It was.

While national unemployment is still well above pre-pandemic levels, labor shortages are one of the many challenges facing the agricultural industry. According to the Canadian Agricultural Federation (CFA), the federal budget on April 19 was insufficient to alleviate key concerns.

“We continue to seek urgent help to avoid food security issues, rising food prices and food system instability,” said CFA President Mary Robinson. I am. April 29 Statement..

“I actually believe that most Canadians underestimate how farmers have been environmentally friendly … [But] It won’t be rewarded or acknowledged, “Charlebois added.