Shared Responsibility

Examining the failures of animal-based supply chains

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Don’t blame farmers for euthanizing animals and dumping milk — we have the food industry we deserve. Millions of litres of milk are being thrown away, more than two million eggs are eliminated from the food chain and pigs and chickens are being euthanized. There is horror in the countryside. Throwing away good food when more than four million Canadians have lost their jobs is morally reprehensible and farmers would be the first to admit it. Over the past few weeks, the public has been repeatedly told COVID-19 has caused the backlog and disruptions of our food-processing system. Yet only time will tell if consumers are willing to forgive the awful, ugly temporary failures of animal-based supply chains. 

It was reported that 200,000 chickens had to be euthanized in recent days and a recent Bloomberg report disclosed more than 90,000 pigs had to be culled and discarded in Canada while millions of litres of milk were thrown into the sewers. While it’s hard to know what’s really going on in the countryside — far from cities and fact-finding eyes — it’s a safe bet that the numbers obtained by journalists are understated. The situation is distributing and, frankly embarrassing for everyone, beginning with the farmers.

Farmers and other agricultural pundits have tried to explain their actions. The foodservice sector being idle and abattoirs temporally closing are the arguments most often used. The different groups representing the farmers say they have no other choice, almost asking for forgiveness. They also claim it’s happening elsewhere around the world. True, alternatives are practically nonexistent, but this points to a much larger issue we have in the agri-food sector.

First, supply management exists in Canada, and only in Canada, to avoid waste at farmgate. Special permits are required in Canada, sanctioned by governments, to produce milk, eggs and poultry, to meet domestic demand. These sectors are waste-immune — or at least, they’re supposed to be. While it’s a good system, for the most part, it nonetheless has its flaws and COVID-19 is highlighting its ugly side. Revenues allocated to producers are set according to production costs, as well as losses. In the long run, due to the well-regimented quota system, consumers will pay for the milk and eggs that are discarded, as well as for the euthanized chickens. Marketing boards, however, will often deny it, deceiving an overly uneducated public about agriculture. It’s supply management’s inconvenient truth. Waste on the farm is a recurring issue and not just this year. What’s different this year is the unprecedented volume. Despite what may have been conveyed to the public, supply-managed farms cannot lose money, period. Losses are pooled over the year, but pricing formulas will eventually allow all farms to make a decent profit over time. It’s the law. 

There are little to no incentives to find alternative solutions to reduce waste at farmgate. Milk, eggs and chicken are, for all intent and purpose, public goods. Milk production is even partially subsidized now in Canada by taxpayers — $1.8 billion over eight years and more is likely on the way. It should be illegal to eliminate these products from the food chain without redirecting these products and giving them a new economic purpose. These products could add to a larger strategic reserve for international markets, producing biofuels or making other food products such as vodka there are a multitude of options. For milk, there are existing technologies to help preserve it for up to a year. A good example of this is Milk Grand Pré, in Terrebonne, Quebec, which uses the UHT processing method. 

For other commodities, it’s very different. For example, if a hog farm opts to euthanize its herd, however immoral, it would do so at its own expense. The same goes for beef, mushrooms, potatoes and most other commodities — producers suffer losses. Incentives for these industries to avoid losses are real, but wasting food on farms does put an emphasis on the very fragile state of our social contract with the food industry. It’s simply wrong, regardless of circumstances. But, as consumers, we have the food industry we deserve. Our industry’s architecture points to what consumers have wanted for decades, which is cheap food. Many are outraged by what’s happening, but simply accepting such outcomes is no longer enough, especially in the midst of COVID-19. 

Farmers are not the only one responsible. The biggest challenge remains food processing in Canada and the key to dealing with surpluses is more vertical coordination. Farmers need to work with processors to avoid waste and senseless animal killings. Better vertical coordination is possible if a strategy exists, but most sectors have never given much serious thought to how to make a value chain work, beyond giving generously to food banks.

Ottawa’s recent move to boost the Canadian Dairy Commission’s credit by $100 million was a good move. This will, hopefully, help our crown corporation to develop new mechanisms to better manage surpluses in the future.

One thing is certain, the pandemic is serving strong case studies up on a silver platter to the vegan movement and opponents of animal exploitation. Due to the destruction of food sources, some analysts claim the capitalization of Beyond Meat could exceed that of Amazon or even Facebook within five years. While there is uncertainty that this scenario is plausible, the impact of COVID-19 is forever a part of our lives. For farmers and others, asking forgiveness after COVID-19 may not be easy.

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