Agriculture Canada has rebuffed a recommendation from the House of Commons agriculture committee that the government investigate the farm income and food price implications of food sector corporate concentration.
The department’s response to a committee report on competitiveness said there have been many studies on the impact of agri-business concentration and the impact on competition.
“None of these studies has established the basis for a claim that anti-competitive practices are operating to the substantial disadvantage of farmers,” the department said.
MPs heard many complaints during committee hearings about competitiveness issues that corporate concentration limits farmers’ ability to negotiate or obtain appropriate returns from the market.
Read Also
Agritechnica Day 2: The future of tractor power, building quicker crop apps and large farms and tech
Agritechnica Day 2: The future of tractor power, building quicker crop apps with Syngenta and large farms and tech
Agriculture Canada said the evidence does not support the farmer assertion.
“Regarding concentration and food costs, while most of the analysis confirms that there has been an increase in consolidation at all levels of the food supply chain in Canada (food retailing, wholesaling, processing, farm and agriculture inputs), the analysis is broadly inconclusive as to whether this has led to a change in market power, higher retail prices or lower returns to farmers,” the department said.
“One of the reasons is that international trade limits the potential for companies in Canada to extract extra income from their suppliers when most imports are traded at world prices.”
The department also rejected a committee conclusion that the government should help agri-retailers improve security to keep fertilizer and pesticide supplies out of the hands of groups that could use them for destructive purposes such as fertilizer- based bombs.
The agri-retailer sector has asked for tens of millions of dollars of government help to cost-share construction of better security systems in their retail and storage facilities.
Agriculture Canada said it is not convinced help is necessary. It said the money the industry is spending to improve security should be enough to ensure public safety and security.
“Until such time as an analysis is provided (by industry), the cost of implementation of such security practices would be at the cost of the industry,” the department said.
“With that being said, the government of Canada is open to further discussion with industry on this issue.”
The department’s general message was that responses are in place to meet the committee goals of better research support, help for traders, opposition to foreign protectionism and better regulations that affect farmers’ access to chemicals and government services.
The committee recommended that the Canadian Food Inspection Agency eliminate cost-recovery billing for inspections during normal working hours.
The government said the CFIA is developing “user fee proposals for areas that are demand driven and industry supported, as well as new programming initiated by the CFIA.”
The comprehensive departmental response offered few hints that new policy initiatives are in the works to tackle the competitiveness problems identified by the all-party committee.
But it acknowledged challenges for farmers from increased competitive forces.
“The pace of change in the agriculture and agri-food sector is becoming more rapid, and new challenges to sustainable profitability along the value chain have emerged,” Agriculture Canada said.
