Agriculture

Down With High Fruit Prices

When an apple costs $2 a pound in the store and the farmer gets $.02 for it, might get $.15 and needs $.30, well, perhaps you can see that the price of food is not actually the price of food but the price of delivery. That includes trucking, sorting, packing, packaging, storing, trucking, and selling. Here, have a look:

Ida Red

That’s the apple as it leaves the farm and becomes a commodity. At that point, the value of it as food reduces to the cost paid to the farmer. Let’s say farmers get their $.30. Like this:

The apple paid for to the farm. The rest is not food cost. You are paying for air.

Now, look again at what happens when the farmer only gets $.15, just on the verge of starvation:

That’s all you’re paying for. The rest of what you pay is not for food.

So, if I go on about how we need to rethink our agricultural policy, and even move apples out of the for-profit system, perhaps you can see all the hunger in the white space above. We can talk for a long time, I’m sure, about how the fruit needs to be transported to the people and made available for them, and that’s true in its own way, but, ultimately, the land produces food for its people, and this system is neither paying for the food nor feeding the people. And if farmers aren’t paid, then why are we doing it this way? It is hardly ethical. Now, let’s look at it another way. For an orchard to have a chance at profit, it’s going to need land prices of no more than $30,000 per acre, and preferably half of that. Currently in the Okanagan Valley, agricultural land is going for up to $100,000 per acre, so people can have a beautiful retirement on a vineyard and play in that status game. This pushes fruit land prices up to the same level. Farmers are pretty hard-working and creative, and they find all kinds of ways to cut costs, but in the end, they all cost money. Here’s a bit of a rough breakdown of a farmer’s costs, in no particular order:

  • Labour.
  • Land.
  • Fencing.
  • Irrigation.
  • Heavy equipment.
  • Chemicals.
  • Containers.
  • Debt servicing.
  • Capital.

What I find fascinating here is that there’s a kind of ceiling on the cost of an apple, a price above which people won’t pay in volume. As the delivery network takes a huge slice, everything but what you see below…

…well, then, the efficiencies are going to be in that remaining fragment, as the rest is already committed. That means: less labour, more equipment, and more debt servicing. That’s a tight squeeze, and a downward community spiral, which I’ve talked about before. Let me just add today that the cost of land, at more than 3X the bearable debt load, is really squeezing hard. If that cost were not present, the little bit that a farmer often gets…

…would match the cost of the food (but not the delivery.) It would be a start. Now, I made the point the other day that growing apples locally and processing and selling them locally would be a way around all this, but there’s another way. Let’s call it: compensation for real estate speculation. If there were an agreed-on land price, let’s say even $30,000 per acre for orchard land, then any sale price above that level would have to compensate farmers for their lack of income caused by that land price. It wouldn’t eliminate high prices, but it would slow their rise and maintain the communities that fill the valley, with food and work and dignity. I can see that many would want in on such a sweet subsidized deal, but if they’re willing to do the work to produce fruit up to a certain pre-determined standard, then why not. I say all this, because, ultimately, it is land prices that are killing this industry, which would all be fine capitalism, the way of the world and all that, except we all have to work and we all have to eat, and currently both are unaffordable. Trade is not an answer. It is also too expensive and ultimately supports someone else’s community in the same struggles as our own. Wouldn’t you, after all, rather that this apple cost $.15 instead of $1.00? Or even 3X that to pay for getting it to you? So, like if you bought it from the farmer, then $.15, but if not then $.45?

You would halve the cost of fruit in your life. With a bit of effort, you could get it down to 1/6th. Talk about fighting inflation. Now, I don’t expect to see this happen anytime soon, but it is, I think, an illustration of how our culture, not the Earth, makes our food expensive. And we can change that.

2 replies »

  1. I am not sure if land prices are the only thing killing this industry. Perhaps it is the loss of the family farm. The land is bought and was paid for long ago, it is more so the way that the industry has not adapted to quality and fewer chemicals that may be driving the next generation away. The small organic farms that I buy from sell out quickly. You get to see the face behind the product. The farms where kids were able to adapt to the changes of the new generation of eaters are still going, as ours is fifty years in. From my side of the fence, the conventional apple industry is destroying itself. I won’t consume conventional apples or juice, because I have to see what does and does not go into the crop–too many chemicals and not enough craft. My opinion.

    Like

    • Hi, Jovanka, your opinion is sound. Thanks for adding it to the discussion. I’d say both factors are at play. I was trying to add that extra dimension. However, industrial growers do call their farms “family farms,” so, that’s another sadness, I must say. Sigh.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.