Recommendations from the advisory council on economic growth about the potential for Canada’s agriculture and food processing sectors — dubbed “agrifood” — are welcome. Such a spotlight on agrifood’s full potential is helpful.
Still, anyone reading the report can be forgiven for wondering why much of this hasn’t already been done, given the competitiveness of the global economy.
The report, titled Unleashing the Growth Potential of Key Sectors, says the agrifood sector has room for significant growth, with a goal of $30 billion in increased exports over the next five to 10 years, and that government and private industry should co-ordinate their approach to identify opportunities and obstacles, then act accordingly.
The report’s authors seem to suggest there is so much opportunity in co-operation between government and the private sector that not to do so would be folly because other countries will take advantage of a laggard system.
As the report notes, “Canada’s future as an agrifood leader is far from assured.” Countries in Africa, Asia, Eastern Europe and South America are poised to take advantage of new technology to become more competitive.
Canada has a First World economy, a First World education system, access to water and huge swaths of land, yet our agrifood sector sits fifth in the world for exports behind tiny Holland (with half the population) and Brazil (whose gross domestic product per capita is one fifth of Canada’s.)
Yes, we can spend a lot of time wondering how this happened, but wisely, the report does not do that. Its authors urge Canada to set aspirational goals, such as becoming the “trusted global leader in safe, nutritious and sustainable food for the 21st century.”
The report offers numerous suggestions on how to tap government and private industry, who would take the lead in certain areas, and possible policy initiatives. One suggestion is bound to be controversial. It accepts a 2014 Conference Board of Canada conclusion that six billion more marketable litres of milk could be produced annually by “progressively reducing obstacles such as rigid provincial quotas that curtail investments in productivity.” That is language for curtailing supply management in the dairy sector.
However, it also has politically palatable suggestions, such as boosting oilseed sales by 20 percent and increasing global market share of pulses to 50 percent from 38 percent by arranging preferential trade agreements and investing in infrastructure aimed at the Asia-Pacific market. (As readers saw in last week’s Western Producer, private investment is already underway to address the latter.) Still, Canada does not have trade agreements with three of the largest economies in the world: China, India and Japan.
However, rail transportation — often a bottleneck — isn’t well addressed in this report. It does suggest offering “incentives” to private investors for projects to help decongest our rail networks.” Recall that a review of grain transportation last year suggested eliminating the revenue cap on railways within seven years, which railway companies say will give them more money to invest in capital. However, that isn’t popular with farmers.
So, politics might get in the way.
Still, the thrust of the report relies heavily on encouraging industry to identify problems, then government streamlining regulations and offering incentives for industry, or at least working with the sector in an aggressive manner. Anything less than making a substantial effort to embrace many of these initiatives will undermine Canada’s competitiveness in the agrifood sector.
Bruce Dyck, Barb Glen, Brian MacLeod, D’Arce McMillan and Michael Raine collaborate in the writing of Western Producer editorials.