Joe waves goodbye to Fred, the driver of the truck carrying his new high starch wheat to the ethanol co-op in town. Fred and his family have recently returned to Fred’s home town to live, lured by the jobs at the ethanol plant. Joe hopes the threatened rain holds off because the truck is supposed to return this afternoon, hauling dried distillers grain from the plant to the community-owned feedlot down the road. The dividend cheques he received this morning from his equity investment in the two ventures are going to help pay the harvest bills.
Read Also
Government, industry seek canola tariff resolution
Governments and industry continue to discuss how best to deal with Chinese tariffs on Canadian agricultural products, particularly canola.
Richard Worzel sees two possible futures for prairie agriculture: one of promise and growth; the other, decades of economic decline.
“There really isn’t a middle ground here,” says the Toronto futurist and financial analyst who advises North America’s largest companies.
“If you don’t commit to changing your role in the economy, you soon won’t be in a position to catch up.”
Worzel said he doesn’t need a crystal ball to make this prediction. Instead, he analyzes what will happen tomorrow if certain choices are made today.
“Commodity prices, especially grains and oilseeds, are not going to get appreciably better going forward,” he said.
“You need to accept this and move on if you want to maintain smaller farms and the rural communities they support.”
Trenton Baisley of Farm Pure, a seed company in Regina, said prairie farmers need to get out from under the “food commodity pricing hell umbrella.”
They need to find specialty products that have specific food and industrial traits used in manufacturing and food processing.
“The myth that western Canadian farmers are some of the most low-cost producers in the world is both wrong and has ill served the industry and it’s time we put an end to that lie,” he said.
Agricultural economist Ken Rosaasen agreed farmers need to find new products and markets and rethink land use.
“Many thought the death of the Crowsnest freight rate would cause producers to take marginal land out of export grain production and shift it into livestock,” said the University of Saskatchewan professor.
“That hasn’t happened. We have as much or more land being seeded to export grains in 2006 as we did in 1976.”
Rosaasen and Worzel agreed that increased livestock and meat production have potential. There may be bumps in the road, such as BSE, but growing individual prosperity in China will generate long-term rising demand for meat that western Canadian farmers could help meet.
However, both also said farmed energy may hold great prospects for prairie producers.
Biodiesel and ethanol made from renewable crops are the basis for future, non-food commodity production in Canada, they said.
Rosaasen believes that some government intervention may be necessary to ensure that Canadian grain, rather than imported corn, provides the feedstock for these new fuels, at least until new, higher yielding industrial crops are available.
Also, farmers need ownership in and control over new biofuel plants to benefit.
“Producers may find they have to be the owners of these new refineries or they will return to undercutting other low- cost sources of grains and oilseeds from subsidized or still developing countries,” Rosaasen said.
But even biofuel demand won’t solve farm income problems, Worzel said. Crops grown for energy production eventually will become commodities like today’s food grains.
Farm communities will need to own the industries that sprout from bioenergy development.
“To keep up with capitalism they will need to both form co-ops or other collective organizations that allow them to share in the wealth created from their crops and keep developing their resources,” Worzel said.
Rosaasen also anticipates the need to capture the profits from energy and possibly the energy itself.
“Ethanol may be used to create hydrogen that will power fuel cells on the farm rather than being wholly reliant on the electrical grid for power needs,” he said.
Rosaasen painted a picture of a biofuel-livestock energy loop, with biofuel-powered equipment harvesting crops to produce biodiesel and ethanol. The byproducts, oilmeal and distillers grain, would be fed to livestock whose manure is processed, with the methane captured to burn for electrical generation and the remainder made into crop fertilizer.
“We’re on the edge of a new agricultural economy, but it seems to be taking a pretty big shove by the old one to get us past the tipping point,” Rosaasen said.
