A cartoon in the January 26 edition of the Globe and Mail depicts two figures dancing with glee near an oil tower while a man in surveyor’s garb tells his friend: “We’ve struck cauliflower!!!” It’s a humorous take on a serious situation – as the Canadian dollar has plummeted, the cost of imported food has risen almost in lock-step.
In fact, the University of Guelph’s annual Food Price Index has calculated that every one-cent drop in the Loonie equates to a one per cent increase in the cost of imported food. Add to this our dollar’s susceptibility to unstable oil markets and the fact that we import around 80 per cent of the fruits and vegetables we eat in Canada, and we have a situation on our hands.
But for those of a more visionary bent, problems tend to present as opportunities. Sandra Hamilton, instigator of and project lead for North Island College’s (NIC) FEED (Food, Environment and Economic Development) Comox Valley project, says there has never been a higher degree of interest in the program. NIC FEED has been bringing local produce into local institutions in the Comox Valley, BC for the past two years.
“[The institutions] have a real problem now … before, it was people like me saying, can’t we do a better job of re-localizing the food system? But the existing system wasn’t really causing them a problem. Right now the system is causing them a problem.”
The program grew from a simple question – what would it take to get a local potato into a local hospital? – and now works with the local CanadaGAP (Good Agricultural Practices – a food safety program) certified farms, along with an acute-care hospital, a long-term care facility, and Custom Gourmet Bistro at North Island College. FEED is still in its infancy, but is poised to grow as pressure on institutions’ bottom-line increases – in fact, partnerships are now being developed to expand the model into the Cowichan Valley and Capital Regional District under the name FEED Vancouver Island. But Hamilton points out that it’s not going to happen overnight – “It is a very difficult transition … but shouldn’t taxpayer-funded institutions lead the way?”
Changing the Buying Behaviour of Institutions
The success of FEED Comox Valley has proven that three main anticipated stumbling blocks – price, food safety, and trade agreements – are in fact not obstacles to pairing up local produce with local institutions. Hamilton points out that “We’re never going to get hand-pulled carrots into hospital – taxpayers are not going to pay for that.” Mid-sized farms with adequate mechanization are capable of growing at an adequate scale to supply institutions at a comparable price point to the big importers. And at a competitive price, there’s no need for governments to mandate exclusively local procurement, which would trip the radar of international trade ‘anti- protectionism’ clauses.
What has been an obstacle is the procurement culture of publicly-funded institutions. Jaymie Collins of Vancouver Island Farm Products, a local distributor and partner in the program, says that while there has so far been a positive response, “Some buyers might not want to change over because they’re used to a certain way of doing business.” Unlike in retail, where the distributor is simply the transporter, institutions treat their distributors as vendors. Hamilton points out: “The global supply chain is so easy … people sit in hospitals and they type into their computer what they want, and miraculously the Sysco or the GFS truck delivers it for them, they don’t really think about how it got there.”
In the open market, institutional buyers have benefited from the ability to use their distributor to access the lowest-priced sellers at any given point. But as those fluctuating prices trend upwards, institutions are starting to sweeten on the idea of locking into direct grow-to-order contracts with local farmers.
Will Farmers Take the Leap?
Because of their rapid success in getting interest from institutions, FEED Comox Valley has been quickly thrust into the supply side question. As Hamilton puts it, “You can have big agriculture matched to big retail, and you can have small-scale organic matched to farmer’s markets or a local restaurant. But as you start to … go beyond the farmer’s market, which is what we’re talking about, how do we scale up from uber-local, micro-local, to be able to relocalize our agricultural systems [and] to supply institutions that are the next step up?”
The question leads to local farmers and what kind of changes they’re willing to make. While some farmers simply prefer to grow smaller scale or are dedicated to organic or permaculture methods, Dave Semmelink of Lentelus Organics thinks a major challenge is also that people are afraid of risk.
“I don’t know a single young farmer who’s taken on a loan the size I have, and it’s not a huge loan … they don’t want to take the risk, they don’t want to go into debt. And yet so many people have fifty thousand dollars of student debt – they’ll do that, but they won’t put that into farming.”
Another obstacle is the mechanization needed to grow at a larger scale. In a sense, it’s a catch-22: mechanization requires stable demand and a certain size of market to make it viable. Semmelink agrees his biggest obstacle is equipment. “I can’t afford a $50,000 tractor, but that’s what I need to produce 20 acres of potatoes, or 30 acres of carrots, or something like that. With the loans that I’m able to get I’m able to produce five acres of carrots maybe if that’s all I was growing…”
Hamilton has been working at creative solutions to these types of barriers – so far she has secured three lots of 200-acre parcels on Vancouver Island that could be long-term leased to multiple farmers. This would facilitate equipment-sharing, and part of each farmer’s piece of land would be used to supply their grow-to-order contract while the remainder would be used by them as they see fit. And as she points out, “We’ve got way too many pieces of fantastic grade A land sitting fallow, doing nothing.”
Once a farmer decides to grow at scale, she or he faces a daunting prospect: entering into direct competition with the large food importers. Sandra Hamilton explains that in the open market, a farmer grows first and then hopes that there will be a market for their produce: “Let’s say for example you’re in the Okanagan and you grow apples, and that week Washington State decides to dump Washington apples at a huge discount … [retailers] won’t buy your apples, they buy Washington State.” The irony is that the institutions are just as nervous – they want to know that if they shift to a local supply chain, they will get what they ordered. But couldn’t both sides simply make a commitment to each other?
Grow to Order Contracts
“A contract means everybody agrees to something, and they lock in. So let’s say for example a farmer usually grows 500 pounds of potatoes, and the hospital says we need 50,000 pounds … they would say ‘We know we’re going to use 50,000 pounds of potatoes and 50,000 pounds of carrots and onions, we are going to enter into a contract.’ And now this farmer has a contract with a public sector institution … he can go to the bank and lease any of the equipment that he needs to mechanize, to get the price point that makes sense. Both sides need security to move forward. The farmer is not going to move beyond the farmer’s market and go from 500 to 50,000 pounds of potatoes without somebody telling him it’s a done deal for sure. And fair enough!”
Hamilton is convinced that grow-to-order contracts are the ideal mechanism to protect our institutions from the currency exchange rate and create stability of demand for the next generation of farmers. “This is millions of dollars that could be coming into our local economy. It’s not that we’re not capable of growing this, we’re completely capable of doing it, it is just the structure of the contracts – which is why getting more strategic, much more smart with how we structure public procurement, as they’ve done in Denmark, and as they’re doing all across Europe – we have to do that with our food system, and right now we’re paying the price of not doing it.”
Claire Gilmore is the Watershed Sentinel intern this winter.
Sandra Hamilton is the Project Lead for FEED Comox Valley at North Island College; a strategist, social innovator, social business educator, speaker and management consultant. She will be speaking on Social Procurement and the FEED program at AVICC in Nanaimo, April 9.
Photo: North Island College launches the FEED Comox Valley Research Project; Photo by North Island College