Pandemic exposes cracks in food chain

Hey there, time traveller!
This article was published 29/05/2020 (2133 days ago), so information in it may no longer be current.

Millions of litres of milk are being thrown away, more than two million eggs are eliminated from the food chain, and pigs and chickens are being euthanized. There’s horror in the countryside.

Throwing away good food when more than four million Canadians have lost their jobs is morally reprehensible. Farmers would be the first to admit it.

Over the past few weeks, the public has been repeatedly told that COVID-19 has caused the backlog and disruptions of our food processing system. Yet only time will tell if consumers are willing to forgive the awful, ugly temporary failures of animal-based supply chains.

It was reported that 200,000 chickens had to be euthanized recently. Earlier this month, Bloomberg disclosed that more than 90,000 pigs had to be culled and discarded in Canada. A few weeks ago, millions of litres of milk were dumped into the sewers.

While it’s hard to know what’s really going on in the countryside, far from cities and fact-finding eyes, it’s a safe bet that the numbers obtained by hard-working journalists are understated. The situation is disturbing and embarrassing for everyone, beginning with farmers.

Farmers and other agricultural pundits have tried to explain their actions. The food-service sector being idle and abattoirs temporarily closing are the arguments most often used. Various groups representing farmers tell us they have no choice, almost asking for forgiveness. They also claim it’s happening around the world.

It’s true that alternatives are practically nonexistent at the moment. But this points to much larger issues in the agri-food sector.

Supply management exists in Canada, and only in Canada, to avoid waste at farm gate. Special permits are required, sanctioned by government, to produce milk, eggs and poultry to meet domestic demand. These sectors are waste-immune — or at least they’re supposed to be.

While it’s a good system, for the most part, it has its flaws. And COVID-19 is highlighting its ugly side.

Revenues allocated to producers are set according to production costs and losses. In the long run, due to the well-regimented quota system, consumers will pay for the discarded milk and eggs, as well the euthanized chickens. Marketing boards, however, will often deny it, deceiving an uneducated public about agriculture.

Supply management’s inconvenient truth is that waste is a recurring issue on the farm, not just this year. What’s different now is the unprecedented volume. Despite what the public may be told, supply-managed farms can’t lose money, period. Losses are pooled over the year and pricing formulas provide farms with a decent profit. It’s the law.

There are little or no incentives to find alternative solutions to farm-gate waste in a supply-management system. Milk, eggs and chickens are, for all intents and purpose, public goods. Canadian milk production is even partially subsidized now by taxpayers: $1.8 billion over eight years, with more money likely on the way.

It should be illegal to eliminate these products from the food chain; they should be redirected and given new economic purpose.

Other commodity producers don’t have the same protection. If a hog operation opts to euthanize its herd, however immoral, it would do so at its own expense. The same goes for beef. Mushroom, potato and most other commodity producers similarly suffer losses.

The business incentives for these industries to avoid losses are very real. Wasting food on farms emphasizes the very fragile state of our social contract with that industry. It’s simply wrong, regardless of circumstances. But we consumers get the food industry we deserve. The industry is framed by what consumers have wanted for decades: cheap food.

Many people are outraged by what’s happening — simply accepting it is no longer acceptable, especially in the midst of COVID-19.

Farmers aren’t the only ones responsible. Processing remains the biggest challenge in Canada’s food chain. The key to dealing with surpluses is more vertical co-ordination. Farmers need to work with processors to establish a strategy to avoid waste and senseless animal killings. Yet most sectors have never given serious thought to making a value chain work, beyond giving generously to food banks.

The pandemic is serving strong case studies on a silver platter to the vegan movement and opponents of animal exploitation. Some analysts even claim the destruction of food sources could mean that the capitalization of Beyond Meat exceeds that of Amazon or Facebook within five years.

Even if that’s not plausible, the impact of COVID-19 is forever a part of our lives. And for farmers and others in the food chain, asking for forgiveness after COVID-19 may not be easy.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

— Troy Media