Farmers are facing mounting financial pressure as grocery prices continue to rise without a corresponding boost in their own earnings, according to the National Farmers Union (NFU).
NFU policy analyst James Hannay says the disconnect between what consumers are paying and what farmers are earning has been widening for decades, and it's a sign of a deeper issue in Canada’s food system.
"This is a question that we have been asking the country since 1959," said Hannay, referencing a Royal Commission that once investigated the growing gap between farm gate and retail prices. "Even they couldn’t really come to a conclusion about what a fair share actually looks like."
What is clear, Hannay said, is that the system isn’t working for producers. "Net farm income has been slowly decreasing over the last forty years," he said. "Even to the point where net farm income was below zero for a good part of the late 2000s and even into the early 2010s."
While gross revenues for Canadian agriculture have surged, Hannay noted that rising input costs, combined with stagnant or even falling farm gate prices, have left farmers stuck between a rock and a hard place.
"You have companies like fertilizer companies and seed companies that hold a huge amount of market power that can dictate prices to farmers," he said. "Processors are trying to keep their costs low, but when they keep their costs low, that means worse prices for farmers."
Hannay also highlighted the influence of corporate consolidation in the grocery and processing industries, saying it’s not just creating a financial divide, it’s driving a wedge between farmers and consumers.
"It’s not only pushing them apart in terms of price but also politically as well," he said. "You’re not seeing the people who are on the other side of that economic transaction, and the issue starts to look very technical when it’s really about who’s taking an appropriate share."
He added that some farmers might believe higher grocery prices would eventually benefit them, but NFU research suggests otherwise. "That’s never going to be true when you have a conglomeration of companies that are looking to keep their costs down, which again just means worse outcomes for farmers."
Certain sectors are more affected than others, Hannay said, pointing to bulk commodities such as grain and corn. These products are often sold into vast global markets, obscuring their origin and limiting the farmer’s ability to earn a fair return.
"They’re being traded in such vast volumes, and we don’t really know how they’re being used," he explained. "A grain or corn farmer might sell their product to an elevator and from there, it’s completely open."
Ultimately, Hannay says the NFU’s data paints a stark picture: farmers are producing more and earning less, while corporate profits rise and consumers pay more at the grocery store.