Grocery Giants and Farmers: Keeping the Lines of Communication Open
Sowing justice amidst chaos on the battlefront
As spring rolls around, farmers in Quebec, Canada, fingers crossed for favorable weather and a fresh start in their relations with large supermarket chains. It's high time for a change in the status quo, as the business landscape has been less than friendly for quite some time.
Take the unique practices that have hindered progress in the food industry. Consider a farmer about to harvest eggplants or broccoli over the weekend, with an agreed-upon price of $100 for a specific quantity with a retailer. Suddenly, on a Friday at 3 pm, a call comes in announcing a better price found elsewhere in the world—say, $60. The farmer is forced to accept or risk massive unsold inventory.
"The farmer has no choice but to give in," says Patrice Léger Bourgoin, leader of the Quebec Market Gardeners' Association (APMQ). "But the farmer never has the capacity to verify if the price they state is accurate."
Such practices are not exclusive to the onion producer; those who deal with more perishable goods, like lettuce, are at a higher risk of Going out of Business.
In addition to price manipulation, APMQ members find themselves on the receiving end of fines for unnegotiated fees or late deliveries. For delays beyond their control, trucks may arrive on time but take "hours later for logistical reasons," leading to invoices imposed when docks are already occupied.
August saw some supermarket chains threatening to cancel Quebec blueberry orders due to an abundant harvest in British Columbia and dropping prices. Farmers were forced into competition, leading to potential losses, or worse, canceled orders at the eleventh hour.
Food processing firms have also been left in the dark when it comes to payments. When invoices are submitted to retailers, they never receive assurance of full payment. Discounts can be applied for flimsy reasons, like non-participation in promotions or unsellable products. And these reductions can take weeks, even months, to settle, with no justification provided to manufacturers.
Over the years, many undocumented fees have been imposed on suppliers, with media reports of these arbitrary costs creating a stir. But it was Walmart that truly pushed the boundaries, announcing a $3.5 billion investment in stores and websites, then passing some of the bill onto suppliers.
Now, Quebec suppliers hope for brighter days with more transparency, fairness, and foresight within the supply chain. Having a code of conduct in place helps, but its success relies on its enforcement and the industry's willingness to change.
The code is voluntary for now, and its impact is uncertain. Fines may have to be imposed to compel companies to comply, as seen in Australia when the government made the code mandatory last April due to years of voluntary adoption.
Quebec's Minister of Agriculture, André Lamontagne, remains optimistic. "I believe the industry will improve its practices for the common good, out of an understanding that we want to make the chain better rather than out of fear of consequences."
The code may not lead to immediate changes in our grocery baskets, but it's a step towards fairness for many Quebec businesses who deserve a chance to thrive.
Relevant Enrichment Insights:
- The Canadian agri-food sector, including Quebec, faces uncertainty due to vague policies, increasing costs, and regulatory burdens.
- Supply management policies, like those in the Canadian dairy, egg, and poultry sectors, can limit competition, affect consumer access, and contribute to higher prices and less resilient supply chains.
- Small farmers face challenges competing against multinational companies, which can lead to difficulties and instability. However, collaborations like the Walmart-Lufa Farms partnership demonstrate efforts to work with local farmers and offer hyperlocal produce.
- Practices such as price manipulation, arbitrary fees, and order cancellations can significantly impact farmers' profitability and their ability to sustain their businesses, resulting in financial instability.
"The code of conduct, though voluntary at the moment, could potentially bring more transparency and fairness to the business dealings between farmers and supermarket chains, ensuring a more stable financial situation for Quebec's market gardeners."
"In the broader scope of the agri-food industry, fostering a culture of financial stability and ethical business practices is crucial for the long-term growth and resilience of small farmers, moving away from the current practices that have hindered progress and threatened their survival."
