COVID-19 causing unsustainable pressure on the food supply chain

Longueuil, May 7, 2020 – In the context of the current pandemic, the Union des producteurs agricoles (UPA), the Sollio Cooperative Group, the Agropur Dairy Cooperative, the Association québécoise des industries de nutrition animale et céréalière (AQINAC), the Quebec Food Processing Council (CTAQ) and Exceldor are joining forces to call on both levels of government to develop an agri-food assistance program to ensure both the viability of the sector and food security for the public.

“The agri-food sector has successfully maintained an uninterrupted food supply throughout the crisis—but many businesses are reaching the limits of their resilience. The federal government’s latest announcement promising $252 million in assistance falls significantly short of meeting the needs expressed by the sector and by the Canadian Federation of Agriculture, which is calling for $2.6 billion. Furthermore, the existing programs completely fail to address the exceptional issues we are facing. To claim otherwise, as our governments are doing, is to mislead farmers and citizens. And transferring the burden onto farmers, who are already under multiple pressures, is not the answer,” stated UPA President Marcel Groleau.

The added safety measures; the full or partial closure of important links in the chain such as abattoirs; the collapse of the hotel, restaurant, and institutional (HRI) market; disruptions in various other markets; labour issues—all of these represent huge (and, in some cases, insurmountable) costs for thousands of businesses in the agriculture and food processing sector. This precarious situation threatens the integrity of our food supply, which relies on the ability of each link in the chain to do its job effectively.

“The crisis at hand calls for exceptional measures. If we are to achieve our mission as farmers and food processors, we require access to more substantial assistance programs that are better adapted to our needs—and above all ones that are flexible enough to accommodate the changing realities of coping with COVID-19. Beyond merely withstanding and reacting to the impacts of the current crisis, we must ensure sufficient supply and compete in the market. The assistance measures announced so far will not be enough to address the full breadth of these needs,” added Ghislain Gervais, President of the Sollio Cooperative Group.

Quebec’s slaughter plants and several processing businesses have put forth herculean efforts in recent weeks to handle the situation, adopting innovative measures to limit the spread of the virus and working with authorities to ensure a safe working environment for employees. Some of the investments associated with these measures may be brought under the new federal assistance program in future. But at present, significant costs and lost revenue associated with the structural changes connected with the current crisis are not being compensated for in any way—even though, paradoxically, the agri-food sector is officially considered an essential service.

“The unprecedented context of COVID-19 adds to the heavy pressure already felt as a result of the international trade agreements that have been signed recently. If governments consider the food sector an essential public service, their actions need to be consistent with this for the sake of the businesses that keep the services running and that have put in all the effort—in terms of both people and money—to ensure that food moves through the chain safely. The assistance programs do not match the reality of the situation and urgently need to be adapted,” continued Roger Massicotte, President of Agropur Cooperative.

Financial assistance measures that are flexible for farmers and food processors must be created to mitigate the long-term impacts on the supply chain and to ensure food security for our citizens. For example, our American neighbours, who are also our main competitors in the Canadian market, have received 10 to 12 times more in direct assistance than the amount announced by the federal government this week.

“The agri-food sector stepped up to the plate on day one of the pandemic and must continue working to keep people fed. People in every link of the chain have buckled down. In spite of all this work, the losses have been large; the impacts are already being felt, and they are here to stay. This means governments must urgently coordinate their efforts to create a direct and exclusive financial assistance program to better support the sector. The existing components of the safety net are not strong enough to address a situation as exceptional as COVID-19,” added Sébastien Lacroix, CEO of AQINAC.

“Food processing is Quebec’s largest employer in the manufacturing sector, with over 72,000 employees. The new health and social distancing measures are causing an estimated $250 million in extra costs for protection and adaptation equipment in the production chains,” stated Sylvie Cloutier, CEO of the CTAQ.

The governments of Quebec and Canada need to act now to support the entire agri-food sector, which also creates many jobs and is a key economic player in preserving the vitality of our regions. There is a growing consciousness among consumers about eating Quebec foods, and food security is currently top of mind for our decision makers. It is beyond urgent that we take a consistent approach on this vital matter, one that is so essential to our society and to the resilience of a key part of our economy and territory.

Here are the concrete solutions we are proposing to support farmers and food processors:

Increase coverage in the AgriStability and Agri-Québec Plus programs
Increase payments from the AgriInvest and Agri-Québec programs
Provide a fund specifically to meet producers’ and processors’ needs when it comes to lost profits in markets
Provide assistance specifically for small businesses that sell primarily to the HRI sector
Provide assistance for prolonged livestock maintenance and freezing of products
Provide a fund dedicated to promoting Quebec food
Provide assistance for the processing sector to cover the extra costs with respect to protective equipment and adapting production chains