Federal plan to redirect $50M in surplus food not as simple as it sounds

When Prime Minister Justin Trudeau announced a $50 million surplus food purchase program last week, it seemed like a win-win: instead of letting the food that restaurants can't use right now go to waste, the federal government would help redistribute excess inventory to organizations that help feed vulnerable populations.

But what the food sector wants to get rid of isn't necessarily what charities need. 

Even though Agriculture and Agri-Food Canada plans to start spending on the program by the end of this month, those intended to benefit from it aren't sure how it will work.

Agriculture Minister Marie-Claude Bibeau said the government would "start the conversation" with food security organizations that already benefit from $100 million in extra funding announced earlier this spring: Food Banks Canada, Second Harvest (Canada's largest food rescue organization), Community Food Centres Canada, the Breakfast Club of Canada and the Salvation Army.

The surplus commodities she suggested might be eligible for these purchases included poultry, potatoes and mushrooms — foods people tend to consume differently at home than when they're dining out.

Eligible commodities are still being evaluated, department spokesperson James Watson told CBC News this week. He added that the purchases "will be done in a manner that respects the needs and health of vulnerable populations in Canada" and "fairly compensates agricultural producers and agri-food processors."

Bibeau told the Commons agriculture committee on Wednesday that officials are consulting with both producers and charities to see what's available, where and in what format, in order to make "perfect matches" where possible. The initial $50 million isn't limited to purchases and could also help with logistics such as transportation, she said.

Food Banks Canada told CBC News it did not have anyone who could speak about the new program.

Lori Nikkel, CEO of Second Harvest, also declined an interview, saying she'd only had preliminary discussions with federal officials. In March, her organization launched a national task force to rescue food and redirect it to vulnerable people during the pandemic. She said she's hoping this program is "streamlined, with a view of keeping this food out of landfill and getting it to vulnerable families as quickly as possible."

Want fries with that?

Kevin MacIsaac, general manager of the United Potato Growers of Canada, estimates his sector is sitting on about $200 million worth of surplus inventory right now. Even if the government purchases nothing but potato products (which it won't), it won't be enough to clear that inventory.

"It's on the right track, because we need to take some ... inventory out of the system," he said. "We've lost so much time with people being at home. It's not going to be used. It's going nowhere."

The first challenge will be transportation — the potatoes aren't necessarily where they're needed most. The largest surplus inventories are in New Brunswick, Prince Edward Island, Alberta and Manitoba.

Quebec has taken a bit of a hit from temporarily sidelining its famous chip trucks, but processors believe the potato inventory in the province is manageable, MacIsaac said. In Ontario, many potatoes are processed into potato chips — and quarantine stress-snacking has boosted snack food sales by over twenty per cent.

Atlantic French fry giant McCain Foods was one of the first producers to applaud the new program, with president and CEO Max Koeune saying he was "encouraged" by the prime minister's appreciation of the problem "and the commitment to more funding if and when required."

But will this program buy up the frozen fries that pubs and fast-food restaurants aren't serving? Such products keep longer than fresh potatoes, but they require freezer storage that charities may not have. Food banks prefer to distribute raw potatoes — but even under ideal storage conditions, last year's crop has to be used for something by August.

If the government purchases mostly raw potatoes, MacIsaac isn't sure who can pack them. Grocery store demand for potatoes is up, so those who wash, bag and box potatoes are busy.

Meanwhile, producers have to make planting decisions without knowing how long the pandemic will disrupt things. French fry processors are cutting their grower contracts by 15 to 30 per cent, based on the size of their surplus inventories.

"The difficulty is the timing," MacIsaac said. "You get one shot at this."

Who is this for?

Canada's initial foray into surplus food purchasing is dwarfed by the decades-long American practice of bailing farmers out with billions of dollars of food aid spending.

"The U.S. programs ... tend to be more designed to support the industry," said Jean-Michel Laurin, president and CEO of the Canadian Poultry and Egg Processors Council. He said he's been told Canada's program will focus on the needs of the recipients.

Laurin said he hopes the government purchases will be destined not only for the food banks that help individual households but also for soup kitchens, shelters and organizations like Meals on Wheels that prepare food for groups.

The surplus inventory his members are struggling with was destined for food services — things like giant packages of frozen egg scramble. "That's not suitable for an individual family, but a soup kitchen can do something with it," Laurin said.

Quick-serve restaurants buy breaded chicken products like nuggets and patties that aren't fully cooked, then fry them before serving. Those uncooked poultry products can't be distributed to individuals, but could be cooked by a shelter, for example.

"The reality of our industry is that it takes a couple of months to adjust production to meet a new lower market demand," Laurin said. While the number of chickens being raised started to go down this week, the turkeys, chickens and eggs from earlier this spring were all processed in some form — and may not find a market in the hospitality sector for months.

"Some of our members are in financially unsustainable positions," Laurin said. "Could [this program] be one of several things that makes a positive difference? Probably. Maybe. We'll see. It depends on how they design it."

U.S. a poor model

"What there's a lot of is not necessarily what we should eat a lot of," said Sophia Murphy, a senior agriculture specialist with the International Institute for Sustainable Development. "We don't really want to see Canadian children or food banks suddenly filled with McCain french fries, honestly.

"If we do this based on what we've produced too much of, and not based on what our own nutritional guidelines would suggest ... there's a mismatch there that in the long run is a problematic way for the government to be trying to mediate."

Unlike the American approach to aiding low-income households — which supports the farm sector with things like school lunch programs but also sometimes sees farcical food aid excesses, such as caves of homeless cheese — the Canadian approach traditionally has been to put money in people's hands and let them decide what to eat.

If Canada is moving toward food surplus purchasing, Murphy said, there's a risk of the market being distorted in two ways.

"You're not giving people [who consume the food] any say," she said — which would interfere with the demand side of the equation.

Meanwhile, she said, you're disrupting otherwise rational corrections in market supply, telling growers "it's okay to grow all these mushrooms ... But I'm not sure buying all their mushrooms is really the answer. What about tomorrow's mushrooms?"

Growers and processors need some protection from the otherwise brutal effects of sudden market changes, but this protection needs to prepare for how the market is shifting, not simply bail them out, she said.

"I suspect we're not going back to a $90 billion a year restaurant industry in Canada, not soon."