Canadian farmers are doing their best to boost efficiency and increase competitiveness but the gains they make are being lost in a market that is controlled by large companies that often operate in a competitive vacuum, says the vice-president of the Ontario Federation of Agriculture.
Paul Mistele told MPs on the House of Commons industry committee Nov. 25 that Canadian farmers – the model of efficiency and competition – continue to face shrinking farm incomes because corporate partners, both buyers and sellers, exercise too much control over market forces.
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“While farmers compete by the thousands, the same competitive model does not exist with (their) production chain partners,” said Mistele, who also serves as a board member with the Canadian Federation of Agriculture.
“Upstream and downstream partners are large and exercise local monopoly power.”
To help the country’s farmers, Canadian politicians must introduce a tougher Competition Act and a federal Competition Bureau that has more teeth and encourages competition at all levels of the value chain, Mistele added.
“Today, the CFA is asking only (that the Competition Act) uphold the principles of competition … and allow Canadian farmers to achieve stronger standing in the marketplace.”
Mistele said the act, when it is rewritten by a future Parliament, should be expanded to allow fines against companies that use “refusal to deal” and “tied selling and market restrictions” tactics.
He also suggested that the scope of the act be expanded from an exclusive focus on suppliers to include buyers as well, since farmers suffer market abuse by both buyers and suppliers. And the farm leader said the act should allow the government to conduct market reference investigations.
“The proposal works to allow the government to inquire into the state of the competition and the function of markets in a sector of the Canadian economy.”
Ontario Conservative MP Michael Chong said there is a contradiction in government food sector policies.
“We have public policy geared towards primary producers to encourage a perfect market, hundreds of thousands of producers competing against each other, producing a consistent commodified product,” said the representative of a rural riding west of Toronto.
“Yet on the input side and on the output side, on the supplier side, on the buyers’ side, we are doing the opposite. We’re encouraging ever increasingly large companies with ever-increasingly large efficiencies and so it’s causing this huge problem structurally in the agricultural economy.”
Ontario Liberal Lynn Myers used the meeting to extol the virtues of supply management as one way farmers can have a bit more market power.
