Food Crisis

Food crisis could hit Canada, expert warns

The growing worldwide food crisis could hit Canada, warns one of the country's top consumer advocates.

Mel Fruitman, of the Consumers' Association of Canada, said that while food costs in Canada are currently among the lowest in the world, that will change.

"We are going to continue to be somewhat insulated for the next little while, but then the bubble is going to burst," Fruitman told CTV's Canada AM on Thursday.

"Competition between the retailers helps us as consumers keep the price of our food basket down, but it also puts increasing pressure on the farms, on farmers, and that can't continue. Somewhere along the way the dam is going to burst."

For Canadians, the rising cost of fuel will have particular impact on the cost of food, particularly when consumers have come to expect a year-round supply of fresh fruits and vegetables in their grocery stores, Fruitman said.

"Anything that is trucked in, flown in, that comes from farther away than our normal hundred kilometres, say, is going to cost that much more to get to us," Fruitman said.

"And of course, the cost of fuel affects the cost of production of that food, it affects the cost of feed for the various animals. So, we are on a rising curve, there's no question about it."

On Thursday, Maple Leaf Foods Inc. announced it will raise prices of its bread as high grain costs cut into profits in both its bakery and hog divisions. The company reported that it lost $10,000 in the first quarter, compared to boasting a profit of $10.5 million during the same period one year ago.

The company also said its first-quarter sales fell by nine per cent over last year.

Canada Bread Co., 88 per cent of which is owned by Maple Leaf, also warned that its prices would rise after reporting that its first-quarter profits dropped by 32 per cent as a result of rising wheat prices.

"The continued rise in wheat prices together with increase in prices of other commodities, such as fuel and general inflation, has had a significant short-term impact on our margins and financial results," Richard Lan, president and CEO of Canada Bread, told The Canadian Press.

However, in the meantime, Canadian retailers aren't putting limits on the sale of any food items.

Wal-Mart Canada issued a statement on Wednesday that it will not follow the lead of U.S. retailer Sam's Club, which recently put restrictions on large purchases of some types of specialty rice.

Meanwhile, there are fears in India that the domestic supply of rice will dry up, and riots have broken out in Haiti among residents who are already feeling the food crunch.

CTV's Paul Workman, reporting from India, told Canada AM on Thursday that India has cut back on its rice exports in order to keep the cost of rice down within the country. However, the move will have far-reaching consequences.

"This is going to have an effect across Asia, but especially in neighbouring Bangladesh, which depends on India hugely for most of its rice imports. We've already seen some rioting in the streets there as a result of it and most of the food specialists here warn that Bangladesh and Asia are going to be the worst hit by this spiraling food crisis, and that it has to be watched very carefully," Workman said.

"And of course there are other agencies saying that there are something like 30 countries that may suffer social unrest as a result of these huge price increases."

The world's food shortage is continually growing and threatens the health of millions of people around the world, including some 20 million of the poorest children.

Josette Sheeran, executive director of the United Nations World Food Programme, focused on the crisis Wednesday during a speech at a London summit dedicated to the subject.

She said the cost of rice has more than doubled in the last five weeks, and the World Bank estimates food prices have increased 83 per cent in three years.

Dave Toycen, president of World Vision Canada, said Thursday that his organization has to cut back on how much food it can distribute when its main supplier, the United Nations World Food Programme, itself cuts back.

The international aid organization is cutting back on the vital flow of food it can provide to the world's most impoverished -- saying it can no longer afford to feed 1.5 million of the 7.5 million people that received aid last year.

Toycen's colleague in Sudan, Seth Le Leu, told Canada AM on Thursday that World Vision's operation in that country has to be scaled back.

"In South Sudan, we were intending on feeding 400,000 people who are returning to Sudan after 20 years of war," Le Leu said.

"Because of the change of policy, we will be treating 40,000 less than that. So that is a tremendous cut in our work."

Toycen also said that the food shortage will hit children the hardest.

"Basic illnesses that children normally have suddenly become fatal once they become malnourished, under-nourished," Toycen told Canada AM.

"And so that's the real concern for us as a child-focused organization."


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