Why are chefs paying more for food; while farmers are earning less?

Agribusiness is Canada’s second largest industry (after automobiles).  The heart of this industry is Canada’s farms.  But they are being squeezed out of existence by both their suppliers and their customers.  Cookstown Green’s biggest savior has been various farm subsidies.  But these have been virtually eliminated in recent years.  Adding to this loss we must struggle even harder to compete with ever more generous U.S., Chinese, Chilean, and E.U. farm and export subsidies.  A scary development is that new farmers are no longer entering our industry as indicated by “the average farmer’s age is approaching 58!”  A related problem is evermore reliance on imported food and the disappearance local food production expertise.  We could very suddenly have serious shortages of food and be unable to do anything about it.  The following is a short extract from a report on the current Farm Crisis by the National Farmer’s Union (NFU).

In 2004 Canadian farmers’ Realized Net Income from the market (Market Net Income) – a measure that subtracts out government payments – fell to -$10,000 per farm. The only year worse than this was 2003 when it was -$16,000.

After 40 years of relative stability (the white dots), Market Net Income plunged to near zero in the mid 1980’s and much of the 1990’s (the black dots). For the past 20 years net income has been near or below 1930’s depression levels.

Today farmers are paying to produce. Were it not for taxpayer-funded support, off-farm income, depletion of savings, and access to debt, farming in Canada would have to cease. 

                              $ Cdn Million      Stockholders’

Corporation           2004 Revenue  5 yr. avg. ROE

Inputs

  Agrium (fertilizers)            3,690            24%

  BASF (chemicals)          60,661            14%

  Dupont (seeds)              35,543            12%

  Pfizer (vet drugs)            68,274            27%

  Deer (machinery)           25,983            12%

Farmers

  Returns from markets    31,641              -5%

Food Services

  Loblaw                          26,209            17%

  Sysco                           38,137            31%

  Darden (Olive Garden etc.)   6,505             19%

  Brinker (Chili’s etc.)             4,820            15%

Processors

  Altria (Kraft)                 116,498 45%

  Pepsico (Quaker Oats)   38,041            32%

  Nestle                           93,969            19%

  Kellogg                         12,499            59%

  Cargill (beef packing)      92,389            12%

  ADM (milling)                 46,998               6%

  Bunge (oil seeds)           32,720            12%

  H.J. Heinz                     10,940            46%

  Saputo (cheese)              3,883            18%

  Molson Coors                  7,565            13%

Cookstown Greens is a working model for the Future!

   I suspect nobody reading this page is making returns anywhere near that of farm suppliers and farm customers; or is anyone making returns as low as farmers.  Thank You for working with Cookstown Greens to help make an alternative a reality.  Our inputs to improve our soil are basically plow-down “green manures” meaning we need no chemicals or heavy equipment.  You are willing to pay fair prices for superior quality (and not demanding obscene profits).   Together we are contributing to a sustainable local industry!  Thanks again.