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11/09/2021

Produce organizations call for government action on supply chain crisis

With the busier import season set to begin, the organizations warn of (more) increases in food costs for consumers
Female hands puts fruits and vegetables in cotton produce bag at food market.
Shutterstock/Igisheva Maria

Organizations representing North America’s fresh produce industry have issued a joint statement calling for “urgent government action” to address ongoing issues that have resulted in widespread disruption to the global supply chain.

The more than 20 signatories include the Canadian Federation of Independent Grocers; Canadian Horticultural Council; Ontario Fruit & Growers Vegetable Association; Ontario Greenhouse Vegetable Growers and regional produce marketing associations in both Ontario and Quebec.

The statement warns that “substantial increases” in costs and delays along the supply chain threaten both food security and the long-term economic viability of the North American produce sector.

The statement includes a long list of supply chain issues impacting the industry including “crippling” port congestion; the cascading effects of inconsistent product delivery; as well as continuing labour shortages and consumer stockpiling.

“Simply put, without multilateral engagement to find solutions, these issues will create long lasting impacts to the detriment of all North American economies,” reads the statement. “Our organizations stand ready to work with governments and partners throughout the supply chain to ensure a path forward that enables the continued flow of our essential goods.”

Industry experts say it will ultimately be consumers who pay the cost for all of these disruptions. “All of the issues raised in the [statement] will ultimately hit the consumer,” says Gary Sands, senior vice-president of public policy and advocacy with the CFIG in Toronto.

“Grocers are on the front line and the last point of industry contact with the consumer. And we believe as an industry, we need to come together to amplify our voice to governments to impress upon them the fact this will have costs—not just operational costs to the industry, but to the consumer.”

Grocers are already grappling with an array of challenges coming out of the pandemic, including rising transportation costs, labour shortages, and price increases even in supply managed sectors such as milk and eggs. “Grocers cannot continue to absorb this escalation in operational costs,” warned Sands. “We need to address the issues driving up these costs whenever and wherever we can.”

The statement notes that Canada and the U.S. have now reached the end of the 2021 growing season, and the “busier import season” is set to begin. That could mean shortages of some key produce items if supply chain issues go unresolved.

According to Agriculture and Agri-Food Canada data, the country’s imports of fresh and frozen fruit increased 12%—to an estimated $6.7 billion—in the five years from 2016 to 2020. Canada imported $685.5 million worth of grapes in 2020, followed by $585.4 million worth of bananas, $569.9 million worth of raspberries, and $379.8 million worth of raspberries.

The joint statement cites a Goldman Sachs statistic that more than 30 million tons of cargo are waiting for delivery. This is particularly problematic for highly perishable products such as fruit and vegetables, it says, resulting in loss of product, sales and ultimately leading to food waste.

The statement also called on governments to address the supply chain challenges with the public in order to reduce instances of panic buying or stockpiling of goods. The statement said the current situation is reminiscent of the early days of the pandemic, while noting that governments took “swift action” to remedy the situation.

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