The Rural Voice, 2006-05, Page 10"Our experience
assures lower cost
water wells"
106 YEARS' EXPERIENCE
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6 THE RURAL VOICE
Keith Roulston
With partners like these who needs enemies?
Keith
Roulston is
editor and
publisher of
The Rural
Voice. He
lives near
Blyth, ON.
The concept of farmers being
partners in a value chain has been
sold to farmers ha recent years by
organizations like the George Morris
Centre. For the most part. farmers
have bought into that concept.
Partnerships are about working
together. Partnerships, whether
business partnerships or marriages.
break down when one side does all
the giving and the other gets all the
benefits.
It's pretty hard to argue there's
much of a fair partnership going on
between food producers and food
processors and retailers in any branch
of agriculture except supply
management.
Speaking at the "Growing Your
Opportunities" conference in
Seaforth, for instance, Gary Morton,
a Nova Scotia consultant to value-
added enterprises, pointed out that
when the consumer pays 93 cents a
pound for apples, the retailer gets 38
cents; the wholesaler, seven cents; the
packer/processor/distributor, 35 cents
and the producer, less than 13 cents.
Now apologists for the status quo
can come up with all sorts of reasons
why the farmer is not getting abused
in this relationship. It's often pointed
out, for instance, that food retailing is
incredibly competitive and retailers
are disappointing their shareholders
with their profit levels (imagine if
farmers had shareholders!).
But any argument that processors
and, retailers are really partners with
farmers in a value chain is under-
mined by what your supposed
"partners" have been doing to under-
mine whatever strength you have.
The most recent example is the
successful effort by cheese makers to
persuade the Canadian International
Trade Tribunal and the federal court
that a milk isolate that contains 85
per cent milk protein should be
classified as a "protein substance"
rather than "natural milk
constituents". Their victory
undermines a supply management
system where all partners had
prospered. Dairy Farmers of Canada
estimates it may cost dairy producers
$500 million a year.
This follows an earlier success in
undermining supply management that
allows unlimited imports of a
combination of butter -oil and sugar
for ice cream production. Canadian
dairy products have virtually
disappeared from ice cream.
A decade ago it was Ontario's
meat packers who persuaded the
Ontario government to destroy ihe
single -desk auction system for
Ontario hogs that gave farmers some
bargaining power.
Out west, independent -minded
farmers have been encouraged to call
for an end to the Canadian Wheat
Board monopoly which gave farmers
more clout in the international market
place, in favour of multi -national
trading companies.
It's become obvious that the
"partners" higher up the so-called
"value" -chain have little regard for
those below them in the chain. Any
equal partnership, as in supply
management, is something to be
undermined.
Many farm groups have hailed
Wayne Easter's report as a realistic
appraisal of the need for farmers to
have more power in the market place.
The George Morris Centre,
however, published a critique in
which it said Easter got it wrong and
that gave examples where size was
needed in the processing sector.
But the results should be obvious,
even for a think tank often funded by
farmers' "partners". In a marketplace
that is increasingly all abodt who has
the clout to make other partners play
the game by their rules, farmers are
doomed in a war of attrition unless
they get more power. Otherwise a
rebalancing of the scales will come
only when the day arrives that there
is an equally small number of
producers to bargain with the small
number of processors and retailers.°
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