Agriculture highlighted as possible future growth leader

Ottawa is being encouraged to tap into Canada’s farming and food sectors as it looks for ways to improve Canadian economic growth.

In its second report, Prime Minister Justin Trudeau’s economic advisory panel outlined how agriculture’s growth potential could be unleashed. Agriculture should be used by Ottawa as a pilot project for other growth industries starting this year, the panel recommended.

The advisory council is chaired by McKinsey’s global managing partner, Dominic Barton, who has repeatedly touted agriculture and, in particular agrifood, as economic engines routinely undervalued by Ottawa. It reports directly to Finance Minister Bill Morneau and is considered in Ottawa circles to be key influencers on the Liberal’s economic policy direction.

The growth potential in this sector, Barton said during an October speech, is “no small potatoes” thanks to an ever hungry world whose population keeps expanding.

Protein demand from Asia is soaring, the council noted, while the world is seeking sustenance from “trusted” markets, a market Canada’s internationally recognized standards should be easily able to tap.

Canada’s agriculture industry employs more than 2.1 million people and accounts for 6.7 percent of the country’s national gross domestic product.

Now, Canada is the world’s fifth largest agricultural exporter, a ranking the advisory panel wants to see changed.

Canada has the potential to be second in the world, behind only the United States, the panel argued. It would require Canada’s agricultural goods to account for eight per ent of global exports, up from its current 5.7 percent, by 2027.

The agri-food industry would require similar increases, the report found. Canada currently sits in 11th spot for global exports. The council wants the industry to improve to fifth place.

It won’t be easy.

Repeated underinvestment in the country’s food processing and transportation infrastructure have led to delays and bottlenecks along the value chain, the panel noted, while gaps in rural broadband internet and missing common analytics platforms are hampering the industry’s ability to tap into new technologies.

Then there’s Canada’s ongoing trade deficit, which the council found sits at US$3.2 billion. Market access is also being challenged by the fact Ottawa does not have preferential trade agreements with three of Canada’s key agricultural markets: China, India and Japan.

Tapping into Canada’s agriculture industry’s growth potential will take 10 to 15 years to achieve.

The council suggests Ottawa create an agri-food growth council made up of 10 to 15 individuals from the private sector who would watch for challenges that are impeding sector growth. The council would report directly to the federal agriculture minister and be supported by a small secretariat.

Meanwhile, Agriculture Canada’s current suite of value chain roundtables would be altered to include “new sub-sector action teams focused on major agfood subsectors and oriented for high impact.” They would be made up of folks from different backgrounds like health, environment and technology to provide broader perspectives.

An interdepartmental task force, chaired by the agriculture minister and backed by the prime minister’s office, would help organize the structures between departments.

Ottawa hasn’t said yet whether it will move ahead with the council’s recommendations. If it does, it’s unlikely the status quo will remain.

Canada’s agriculture and agri-food industry, a sector that has sometimes earned a reputation for being slow to change, must be prepared for a new approach.

Big dreams can mean big changes, which can easily trigger conflict unless all parties involved are willing to be flexible.

Ottawa’s key economic advisers say the growth potential in Canada’s agriculture industry cannot be ignored any longer.

Ottawa is being asked to pay attention. Canadian farmers and processors are going to need to adjust to life in the spotlight, where praise and scrutiny often come hand in hand.

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