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Howard Staff was on his way to the Ming Dynasty Tombs when he saw his apple orchard's future.

It was 1987, and Staff, a Niagara grape and apple grower, was in China consulting on how to improve local wine production. During a break for a bit of sightseeing, he stumbled upon an enormous apple orchard that had been planted during the Cultural Revolution. "It was just huge—500 acres, just coming into production," he says. Nearby, there were even larger orchards. "Thousands and thousands of acres of apples," Staff says. "When you see that kind of thing, you think, 'Oh my goodness!'"

Staff and his colleagues abandoned their trip to the Ming Tombs and instead sought out the orchard's foreman to learn more. It emerged that the young orchard didn't yet have what Staff calls a "good apple"—a nice, round, sizable, eating fruit—but it was capable of producing massive amounts of juice. The trees weren't the advanced varieties Staff had back in Canada, and the technology was antiquated: Labourers were spraying pesticide by hand, chemicals slopping down their backs. But Staff knew then and there that his time in the apple business was limited. "By the sheer volume, they were going to snow us under," he says. "Whether they were using old technology or not, they had enough people to make it work.

"I told the fellows, 'We're in trouble.'"

Two decades after Staff's visit to China, Ontario apples bound for processing are worth less than they were in the 1980s. While cheaper Chinese apples have invaded the market—just as Staff foresaw—the cost of production in Ontario has risen. The resulting squeeze has forced some farmers to tear out their apple trees in favour of other crops. Two other apple-growing provinces, British Columbia and Quebec, enjoy slightly stronger markets, but farmers there are also finding the apple business to be an ever tougher struggle.

The cutting edge of the apple invasion is concentrated juice. After a decade of rapid growth, China makes most of the world's concentrated apple juice, exporting almost 500,000 metric tons, with further expansion predicted. Last year, Canada imported more than seven million litres of fresh concentrate from China—the vast majority of what's used here—to make fruit cocktails. Apple slices, used to make prepared foods like turnovers and pies, are imported from China, too.

And China has no intention of limiting itself to apples. Having established itself as the world's manufacturer—dominating the production of prac-tically every consumer good from baubles to sofas—China has turned its attention to food. The country already grows half of the planet's fruit and vegetables, and has captured more than 60% of the market in categories such as pears, asparagus and black beans. In other words, the endangered domestic apple may be a harbinger of the future of farming and food in Canada.

The erosion of the Ontario apple industry goes back to the late 1980s, says Brian Gilroy, vice-chairman of the Ontario Apple Growers. That's when apple powerhouse Washington State had a bumper crop that flooded the market with cheap fruit. "Then China came on the scene gangbusters and started to export huge amounts of apple juice concentrate, and the price came down and down," Gilroy says.

In British Columbia, it's a slightly different situation, says Joe Sardinha, president of the BC Fruit Growers' Association. While farmers in B.C. have a healthier local market for fresh fruit than their Ontario counterparts, their prices have nonetheless been indirectly affected by Chinese exports. Whereas Washington apples used to sell in Asian markets like Hong Kong and Singapore, cheaper Chinese fruit has taken over there. "The displaced Washington shipments of fresh apples flood the Canadian market with extras," says Sardinha, who farms in the Okanagan Valley. It's the late '80s all over again.

China's biggest advantage is, of course, its famous cheap labour. For the cost of one farm worker in Canada, you can hire around 65 in China, Gilroy says: Wages there are about $1.50 a day, whereas the total cost of farmhands in Canada is $12.50 an hour. And apples, which must be handled just as carefully as eggs because they bruise so easily, are a high-labour crop. "Unless growers get something more in return, we are all going to be pushed out of existence," says Gilroy.

Howard Staff, whose family has worked the same strip of rich Niagara Peninsula land since 1814, has already been pushed out. Today, grapes are his mainstay crop; the apples are gone, even though Staff's 100 acres of high-density trees, which represented a $2-million investment in the late 1970s, enjoyed a production ratio of more than double the provincial average. In 2003, Staff picked all of the orchard's best eating apples. Normally, he would have then gathered the "cull" apples—fruit that is either bruised or too small for the supermarket—to be pressed for juice. But the price for cull apples had fallen from the 12-to-14-cents range to just 4.5 cents. So he raked over 275 tonnes of fruit into piles and ground them with a brush cutter. "It was more expensive to sell them than to destroy them. It was our cheapest way out," he says. The next year, he replaced the orchard with grape vines.

If you take a stroll down the juice aisle of the local grocery store, you'd never know that there are ever fewer apples being grown in Canada. Almost all the jars, Tetra Paks and jugs of apple juice and apple fruit cocktail are proudly marked "Product of Canada." But the drinks are likely made from Chinese concentrate. Under federal policy, if at least 51% of direct production costs are incurred in Canada, products that come into fruition here, so to speak, can bear the label "Made in Canada."

Apple juice processors are doing well. Thanks in part to a series of acquisitions, Quebec-based A. Lassonde Inc. is the dominant player in the juice business east of the Prairies. Its stable now includes the Oasis, Allen's and Fairlee brands. In the West, the equivalent company is B.C.'s Sun-Rype Products Ltd., which has enjoyed a slow but steady increase in profits over the past five years. The two are now the only companies in Canada that operate apple juice concentrators, so their clout is considerable.

Farmers feel shut out. This year, the farmer received 5.38 cents a pound for juice apples at the orchard gate. Or, to put it less abstractly: On a $4 container of fresh juice, the farmer makes, at most, 10 cents. "The profitability that [the processors] are enjoying currently isn't being passed on to their Canadian suppliers," says Gilroy. "If they would pay even two cents a pound more for our product, it would make a huge difference for our industry. Even a penny a pound more would make a difference.

"Their ability to source enough juice apples is going to disappear if they don't start paying more."

That industry dynamic is as invisible to consumers as the ultimate source of much of what they buy in the grocery store. In light of recent scandals out of China—tainted pet food, lethal antibiotics, lead-coated toys—the fact that more and more of the food we eat is coming from that country worries some apple growers.

Daniel Ruel, director general of the Federation of Quebec Apple Producers, says that Chinese apple growers may be using a number of pesticides that are outlawed in Canada. Staff raises a similar concern, saying that even if the Chinese use pesticides that are permitted in Canada, they likely don't adhere to the same spraying schedule that Canadian farmers are obligated to follow. (Here, spraying is forbidden for a designated period before harvest to minimize pesticide residues.)

However, Henri Bietlot, national manager of the Chemical Evaluation Section of the Canadian Food Inspection Agency, says that all foods sold in Canada are held up to the same regulatory standards, no matter where they originate from. The agency checks apple juice for safe levels of approximately 260 pesticides.

If anything can topple the Chinese apple, it's the cost of fuel. Harriet Friedmann, a professor at the University of Toronto's Munk Centre for International Studies, researches global food systems. She argues that the Chinese ability to sell juice concentrate so cheaply is dependent on many factors, including the current low price of fuel.

"If fuel becomes more expensive, which could happen suddenly, everything that seems to be a comparative advantage at the moment could disappear," Friedmann declares. In the meantime, she adds, the more farmers tear up their trees, the more we lose our ability to grow our own apples—or pears or grapes or whatever crops we are turning away from.

Until now, it's been the juice concentrate that has made the dent in the Canadian market, but this year Chinese fresh eating apples have arrived in produce sections.

It's news like this that may push one grower on the edge of Ontario's greenbelt toward selling the family farm. For now, he prefers to remain anonymous for fear of damaging what's left of his business. But he's got an exit plan: The subdivisions that are spreading toward his fields are also bringing offers for his land. "Let them come; I'm ready," he says. "Farming is for the birds."

ARE TOMATOES NEXT?
Ross Siragusa, CEO of the California Tomato Growers Association, returned this August from an industry-sponsored visit to China's new tomato fields. What he saw in the Xinjiang province resembles the rustic—but ultimately dauntingly competitive—scenes that Ontario apple farmer Howard Staff saw in China's apple orchards of the late 1980s. The arid tomato fields are run by collectives and have relatively low yields. The tomatoes are hand-picked for the most part by older people, placed into 50-pound sacks and then driven to processing plants in small trucks and tractors. On his return to California, where tomatoes are irrigated, mechanically harvested and then shipped in 25-tonne trucks, Siragusa sent out a communiqué to his colleagues: "Visit to China draws conclusion that it will not supplant California any time soon."

Perhaps not for fresh tomatoes. However, tomato paste is a different matter. Ending the traditional dominance of Mediterranean countries such as Italy, China has suddenly become the world's top exporter of tomato paste.

Staff cautions against Siragusa's confidence. "The tomato grower should look over his shoulder. It's come home to roost in the apple industry, and it could happen in the tomato industry, too."