Food prices deserve detailed scrutiny

  • National Newswatch

Canada should investigate food price as the U.S. does.Ottawa-The reasons for rising food prices are far from straight forward and the federal government needs to conduct a careful examination of them, says Tyler McCann, Managing Director of the Canadian Agri-Food Policy Institute (CAPI).A good place to start would be to emulate the USDA's food dollar research program, which in 2021 found about 14.5 cents of the consumer food dollar was split about evenly between farmers and ag businesses, he told the Commons agriculture committee.The USDA analysis shows that farm production, food processing and packaging costs have all gone down while costs in the wholesale trade food sector have risen during the last two decades.“Food inflation is an important but complex issue,” McCann said. “It is not one single issue, but a complex web of issues impacting each other. Better data and analysis would lead to a much more informed dialogue. We simply do not have this level of credible, meaningful analysis in Canada.”The agriculture committee has been studying food price inflation and its work “would benefit from an organization like Agriculture Canada, Statistics Canada or the Competition Bureau producing this level of detail.”The committee should consider recommending the government conduct the same level of analysis that is available in the U.S. and make the results public, he said. It is important to understand that food is diverse commodity and the drivers of its cost vary widely.Within Statistics Canada's Consumer Price Index, food is actually 190 different products. “Within that diversity, some things are generally true, like the more ingredients in a product, the smaller the farmer's share is and the more that consumer's dollar goes to labour costs.”It also has to be understood that food inflation hits poor households harder and they need the most help, McCann said. A recent Angus Reid Institute survey found more than half of the respondents reported that it was difficult or very difficult to feed their household. However, those numbers differed greatly by income.Food insecurity in Canada is a much deeper issue, he said. A report from the Proof Program at the University of Toronto found that “the deprivation experienced by households that are food insecure is not confined to food.” It concluded that food insecurity is an income issue, not a food issue.“As is often the case, there's a lot that we don't know in Canada, or information we're missing that's available in the United States or other markets around the world.” There is a clear need for “for a more rigorous, more compelling and more objective set of analysis around what is actually happening with the cost of food.“This isn't just a retail issue. This is an issue all along the value chain, where we don't have the same level of information and understanding as is available in the United States or some other markets. For example, we know, in Canada, that the top five grocery chains have about the same market share as the top 20 in the United States, but once you get beyond that high-level conclusion, it's hard to really understand what might be happening underneath.“I think it's become increasingly clear, if you look at how this debate has unfolded around food inflation and the drivers of it, that we just don't have that information.”