FOOD FOR THOUGHT
by S. Cosburn Mortimer, research director, Bankers' Alliance for Responsible Freedom
Across Canada, food banks are in crisis. Food drives fall short, staff burn out, and eventually one food bank after another closes its doors.
In an effort to remedy, or at least palliate, these problems in an important national institution, the Bankers' Alliance for Responsible Freedom struck a task force which went across Canada visiting food banks, observing their operations, and talking to staff and customers.
What we found was truly shocking. Day after day, at food bank after food bank, we were repeatedly faced with the ugly reality that food banks operate in contradiction of every known principle of banking!
Try to imagine, if you will, a group of investors who try to operate a chartered bank according to the principles on which food banks operate. First, these investors assemble a large store of money. Then they throw their doors open to the public. Customers arrive in search of money. So, does this bank lend these customers the money they need? No, it does not. What it does, ladies and gentlemen, is give these customers money! It gives them money free and clear! The money goes out the door, to end up one knows not where.
Naturally, any bank operating on these principles will shortly find itself running out of capital. So what does the bank do? Does it institute sound banking principles? No, it holds a drive! It asks the public to give it money!
Paper bags, inserted in newspapers, are to be filled with cash and left at the nearest fire hall. Large bins are placed in retail stores so that shoppers may deposit money in them (with, of course, no hope of a financial return). Then, once the bank has replenished its supply of money, it starts giving it away again!
Obviously, there is no doubt about why food banks are in trouble. The food bank will be saved as an important Canadian institution only if sound banking principles are implemented.
First of all, food should not be given away, but instead should be lent at interest. For example, a kilogram of peanut butter could be lent to a customer at an annual interest rate of 12%, or 120 grams of peanut butter. Monthly payments would be 93.33 grams, exclusive of any service charges. Similarly, a dozen eggs lent at 12% per annum for a year would produce interest of 1.44 eggs (for purposes of calculating fractional eggs, either powdered eggs could be accepted in payment or equivalences could be established with some easily measurable commodity, such as margarine or rice).
Food banks should also accept interest-paying deposits. They would profit from these deposits by selling the deposited food to small storekeepers at prices below those the storekeepers could obtain from conventional distributors, while paying back the deposits and interest from purchases made at even larger bulk discounts.
Food banks could also offer equivalents of financial instruments. For example, Registered Retirement Savings Plans would allow customers to ensure their nutritional security in retirement. Mutual food funds could assemble holdings of types of non-perishable food likely to appreciate in value.
In short, there is no reason why today's food banks should not give rise within the near future to nationwide chains of nutritional investment centres which would rival, if not outstrip, supermarkets and other conventional outlets servicing the nutritional needs sector. They would by this time be listed on stock exchanges, and the resultant infusion of capital would enable expansion of this concept throughout the food-consuming world.
The commercial banks of Canada are prohibited by their charters from entering the nutritional services sector. We therefore offer these suggestions as a free service (E. & O. E.) to the food bank community and to you, the Canadian nutrition consumer.
Food for Thought © Coolth, 1998
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