Senate lays groundwork for value-added efforts

Observers of Canada’s Senate have noted in the past that while the politics can be awkward, there is a lot of good work done at the committee level.

And so it is with the Standing Senate Committee on Agriculture and Forestry, which has produced a useful report on the future of Canada’s agriculture.

The report looks at how to improve Canada’s value-added food sector. There are no eureka moments in the report. To read it is to nod one’s head often at the challenges, opportunities and actions required to help the agricultural and agri-food sector reach its potential.

But that’s a lot of nodding.

Canada seeks to become the world’s second largest agricultural exporter in a few years (it is currently fifth).

A major part of the issue is an old story. Canada does not process enough of its own materials before shipping goods to other countries. Canada only processes half of its agricultural output. Food, beverages and food manufacturing is one of the biggest sectors in Canada, employing about 250,000 people, so the opportunity is impressive, but so are the challenges.

What’s needed, the report concludes, is for much more co-operation between government, the private sector and academia. The report notes that the recently established superclusters — in this case plant protein and next generation manufacturing — offer opportunities in this area.

It cites the Netherlands as an example of what can be achieved with such an effort. Canada has 34 times the land mass and more than twice the population, yet the Netherlands is the second largest exporter of agricultural products in the world. (Flowers and bulbs, dairy products and meat are leading exports.) It does that in part by prioritizing agriculture — going so far as to establish the strategic importance of its Rotterdam port, and by processing products and placing a heavy emphasis on research and new technologies.

It’s noteworthy that most of the recent growth in Canada’s value-added sector has come from small- and medium-sized businesses, but they do not have as much capacity to invest in research and technology as larger operations. Addressing this would be a catalyst to growth in the value-added sector.

The volume and scope of issues to address is staggering: labour shortages, patchwork provincial regulations, lack of processing (crushing) facilities, a competitive regulatory framework (new seed and input products are sometimes approved faster in the United States, allowing the value-added sector to get a head start there), competitive tax policies (the carbon tax is anathema to this initiative), non-tariff trade barriers, and transportation infrastructure are just a few.

The transportation issue is so important that officials in Japan have expressed wariness of purchasing Canadian agricultural goods for fear of being unable to receive timely delivery through Canada’s rail system.

Still, Canada has done a lot of things well, and things are improving. Canada has 12 free-trade agreements covering two thirds of the world’s gross domestic product. More trade agreements are being explored. The Canadian Food Inspection Agency is respected worldwide for its efficiency, helping Canada’s reputation as one of the safest food systems in the world. Canada has leading edge traceability processes (a key recommendation is to improve this further) and recent modernization of transportation regulations are addressing some key concerns.

Canada has ambitious plans to expand one of its most enduring and successful sectors into world markets. We must do so; if not, others will take our place. But this report shows that the effort required to improve Canadian value-added and export initiatives will require a much more intensive initiative.

Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.

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