In an effort to keep pace of the ever-bloating cost of living, the government of Ontario – Canada’s most populous province – recently announced a 31.5% increase to the province’s minimum wage. And with hourly costs set to rise from US$9.13 to US$12.00 over the next 18 months, much of the fruit and vegetable sector is up in arms.
To those unaccustomed to the cost of Canadian living – in many of our cities anyway – a substantial increase in minimum wage is, without a doubt, desperately needed by all too many people. Already thin margins in the fruit and vegetable sector, however, have farmers scrambling for options.
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As one of my fruit-grower friends put it: “I feel like the government kicked me in the vitals, then stole my wallet while I was doubled over. There’s no time to plan. It’s just too much and too fast.”
Streamlining production in Ontario
Naturally, technology offers one solution. Streamlining production, after all, can translate to long-term economic sustainability. Problem is, Ontario growers don’t have the “long-term” to adjust, and many small or medium-sized farmers simply don’t have the capital to front and sustain substantial investments in automation.
The reality is this:
- Margins are already thin, with expenses continuously going up faster than farmgate prices.
- Ontario growers, by and large, have no ability to dictate price.
- Cheaper imported produce is a constant threat.
- Buyers are also getting squeezed by the wage hike, meaning the market for more expensive, locally sourced products continues to shrink.
Still, everyone deserves the chance to earn a decent living. That is, dare I say, unarguable, and my fruit-grower friend couldn’t agree more. His industry’s issues don’t necessarily come from an inherent opposition to higher wages.
They come from unexpected decisions, from the disconnect between an urban-heavy government and a rural sector, and from Populares-style decision making.
Reality dictates behaviour, though, and farmers have already started downsizing. And, in case a reality check was needed, the commodity group representing Ontario’s berry growers has stated that “the increase in labour cost is greater than the net income currently received by growers.”
Technology could have some answers in offering some automation. However, many of Ontario’s small and medium-sized growers simply cannot invest in long-term technological solutions – however awesome they may be.