Studies of agricultural co-ops and food safety fill U of G researcher's plate
BY ANDREW VOWLES
Why care about agri-food co-ops? Prof. Getu Hailu, Agricultural Economics and Business (AE&B), has a ready response. Whether you live in the city or the country, do you care about how much you pay for your food?
Ensuring an adequate food supply and reasonable costs lie behind Hailu's research interest in how co-ops work and particularly in how traditional kinds of co-operative organizations are weathering 21st-century challenges. A related interest in food safety — especially how information about food safety and health influences consumers to make wise food choices — occupies the other half of the agenda for this busy researcher.
Originally from Ethiopia and a PhD graduate of the University of Alberta, Hailu is interested in mechanisms that benefit co-ops and policy changes that might help these enterprises thrive. A prolific writer who has also presented his research results to agri-food co-op associations and other professional groups, he hopes to see his work feed into public policy decisions here in Canada as well as in developing countries.
“As an economist, I care about the welfare of society, how taxpayers' money is spent,” he says.
Like all co-operative organizations, agri-food co-ops are owned and controlled by members. Including such near-iconic entities as the Saskatchewan Wheat Pool — the largest co-op of its kind in the country — these groups process and market farm products and provide supplies and services for farm production and marketing.
Canada has about 1,300 agricultural co-ops, according to a 2005 report by the Canadian Co-operatives Secretariat, based on a survey conducted between 1998 and 2002. Agricultural co-ops had almost 390,000 members in 2002, down from more than 450,000 in 1998. Over the same period, total agri-food co-op revenues fell by more than 26 per cent to $14 billion.
In a mini-blizzard of papers published this year, Hailu and his co-investigators in Edmonton have studied factors affecting co-ops. They note that the past quarter century has brought increased competition for traditional organizations from local investor-owned firms and multinational companies under deregulation and globalization of trade.
In the past seven years alone, a series of mergers has changed the landscape for several Canadian co-ops. In 1999, the Alberta Wheat Pool merged with Manitoba Pool Elevators to become Agricore Co-operative. Two years later, Agricore merged with United Grain Growers to become a publicly traded, investor-owned firm called Agricore United.
Elsewhere, Agrifoods International (Dairyworld), Canada's second-largest dairy co-op and Western Canada's largest food manufacturer, was sold to Montreal- based conglomerate Saputo in 2001.
Hailu says private multinationals are eyeing co-ops as potential buyout targets. Ironically, he says, many co-ops were established around the beginning of the 1900s precisely because their markets were seen as too small to support private businesses.
“They arose because of market failure. Maybe there was lack of market access for various groups of farmers providing goods and services or an absence of markets to process and sell their products.”
For his dissertation, Hailu studied capital constraints in Canadian agribusiness supply and marketing co-ops. He has also examined co-op performance and long-term financing, the structure and governance of agribusiness co-ops, conflicts of interest and efficiency of supply and marketing co-ops. In a different study, he compared the cost-efficiency of Alberta and Ontario dairy farms. Here at Guelph, he plans to look at some of the same issues in Ontario co-ops.
Hailu also plans to continue his studies of food-safety and health economics and how consumer education affects markets for various products. He's already investigated how consumers use information to weigh the health and nutrition pros and cons of eggs. He'll now switch his gaze to sweeteners, part of the ongoing public debate over obesity and weight for consumers and policy-makers alike.
The questions fall naturally into an economist's realm: How is demand affected by prices, income and health information? What might be the effect of placing some kind of consumption tax on “unhealthy” products, akin to taxing cigarettes?
“To develop these policies, you need to have demand-and-supply parameter estimates,” says Hailu, adding that “everything in moderation” is his own dietary dictum. “I'll focus on a few products and see how Canadians behave.”
He studied agricultural economics at Alemaya University in Ethiopia and at the University of Hannover in Germany. In Ethiopia, he served as a consultant on development research projects involving camel productivity and health, and hotel and recreation investment. He maintains a strong interest in Africa and economic development issues. In particular, he'd like to focus future research on issues of health and economic problems that result from HIV/AIDS.
Beginning his PhD in South Africa, he moved to Canada in 2000 to complete the doctorate in Edmonton. That's also where he got his first taste of Canadian winters and where he tried cross-country skiing. He plans to explore more of Ontario by hiking and biking. (Fittingly, he's a regular customer at Mountain Equipment Co-op.)
He chose Guelph based on what he says is AE&B's reputation as one of the top departments in Canada. Settling into his new home, he figures he'll have a bit of time before having to pull out those skis. Meantime, he's taken excursions of a different sort.
“I discovered the African Lion Safari,” he says with a laugh.
