OTTAWA — Investors are excited about agricultural opportunities identified by the federal government’s Advisory Council on Economic Growth, says the council chair.
Dominic Barton, who is also global managing director of the management consulting firm McKinsey & Company, said Canada’s agriculture and food sector represents significant untapped economic potential.
There is an opportunity for both foreign and domestic investors to better position the sector.
“We think it is an industry that is not given the respect it deserves,” Barton said to applause at the recent Canadian Federation of Agriculture annual meeting.
“The future is agriculture.”
The council says that public and private partnerships can unleash the sector’s full potential. In its first recommendations released last fall, it focused on attracting more foreign direct investment, developing a national infrastructure strategy and increasing immigration.
A second wave of recommendations released in early February suggested policies to drive innovation, improve workforce skills and participation, and position Canada as a global trading hub.
All those would help boost agriculture and food production, Barton said.
Globally, agriculture represents $13 trillion and 10 percent of all consumer spending around the world, he said.
“In the next 40 years, we’re going to have to match the food production that we did in the last 10,000,” he said. “That’s a pretty big bar.”
Two billion more middle-class consumers in Asia who want more protein will drive that demand.
Barton said Canada has the land, water, political stability and access to capital to supply that food. The government needs to adopt policies that can make it happen.
“Canada ranks fifth in agriculture exports and 11th in agfood exports, behind smaller countries like Holland and behind less economically advanced countries like Brazil in both categories,” says the council’s memo on the sector.
“Enabling the sector to move up to second place in agriculture and to fifth place in agfood would imply an additional US$30 billion in exports in today’s distribution of global export shares, equivalent to nearly two percent of current GDP.”
Public and private collaboration is critical to making this work.
The council has recommended stakeholders from both areas launch an agfood pilot to identify the major obstacles to growth, set goals and recommend concrete action.
The approach would then be improved, refined and applied to other areas of the economy.
“What we found interesting is the input we’re getting from companies, not just in the agfood area but also investors as being very significant,” Barton said in an interview.
The sector hasn’t always been seen as the “sexy” place to put money, but that is changing as investors realize the opportunity, he said.
They are beginning to see it for the high-tech industry that it is.
He said there are challenges ahead. Canada must improve its infrastructure, add more value to products and deal with its aging workforce.
For example, job vacancies in the meat processing industry are hurting that sector’s ability to compete.
Barton said the council has recommended forming a sector council of 10 to 15 private sector leaders who would champion agriculture and food, represent the broad value chain and report directly to the federal minister of agriculture.
He said the private sector is best positioned to lead, while the government would work with the provinces and trade partners and set policies.
Since the council released its recommendations, Barton said investors and others such as universities are asking how to participate.
“We’ve got a ways to go to get people to understand what it is,” he said. “The Canadian public, they’re not thinking about this enough.”
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