Local economy will take a hit if fruit prices keep falling

Okanagan residents are being warned that the economy could sustain a body-blow if low prices permanently cripple the tree fruit sector.

  • Feb. 11, 2011 12:00 p.m.

Okanagan residents are being warned that the economy could sustain a body-blow if low prices permanently cripple the tree fruit sector.

The average price for last falls’ apple crop is 12.6 cents while the cost of production is 22 cents.

“We made more on our fruit 10 years ago,” said Joe Sardinha, B.C. Fruit Growers Association president.

“This is the third year in a row where prices are falling below production. You don’t have to be a math genius to know this isn’t sustainable.”

The industry pumps about $200 million a year into the valley’s economy.

“The current situation puts the industry at risk and that could have a huge hit on the economy and businesses that rely on the industry,” said Sardinha, adding that growers purchase equipment, supplies, vehicles and groceries and use services like restaurants.

Sardinha also doesn’t believe empty tracts of land, where fruit used to be grown, would present an attractive image for the Okanagan.

The BCFGA will demand emergency funding from the provincial government although an specific dollar figure has not been determined yet.

“Growers need resources to operate for this coming year,” said Sardinha.

Direct payments worth $10 million were sought in 2010, but senior government denied that request and provided $5 million marketing opportunities, infrastructure enhancements and pest management. 

“There’s been nothing but government resistance to industry assistance. They use the excuse of possible counterveil duties from the U.S.,” said Sardinha. “But the Americans have all kinds of crafty ways of subsidies and Canada doesn’t question them.”

Sardinha is also critical of what he believes is an ineffective bureaucracy with support programs.

“Many growers are still waiting for 2008 and 2009 Agristability payments. The program was promised to assist with revenue decline,” he said.

He insists that assistance should not be considered a subsidy because the provincial Agricultural Land Reserve restricts what activities can occur on private land.

“When the ALR was created, farmers would preserve land and the government would have programs to preserve the farmer,” he said.

“We’re not looking for handouts but after three years of this, if the government doesn’t get the message, who will?”

A number of factors have led to low apple prices, including a high Canadian dollar relative to its U.S. counterpart and a large Washington State crop. “They can ship apples north of the border unfettered,” said Sardinha. “NAFTA gave them that. We also get apples from Chile and New Zealand.”

Sardinha also says competition among retailers has squeezed prices as has declining production in the valley and poor weather over the last three years.

Sardinha also blames government food policies, which have cost about $5 million over three years.

“We’ve been saddled with taking the liability out of retailers’ hands. We’re letting food retailers off the hook and we’ve seen nothing in return to cover costs.”

Kelowna Capital News

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