It’s high time Canada embraces an export competitiveness policy for agriculture.
In fact, in 2017 the Canadian government embraced the goal of increasing agrifood exports by almost 50 percent by 2025, to $75 billion.
That’s good because it provides farmers, the food industry and everybody involved in agriculture with the confidence that it is an officially supported sector of the economy.
But it’s not enough and that goal has been getting undermined by apparently unthinking acts of federal and provincial governments operating without a plan.
For example, the federal government has provided significant and vocal support for the plant protein industry, with investment from the protein supercluster, Export Development Canada and other federal money supporting efforts to get Canada on top of the new and promising industry.
Yet it is simultaneously imposing profitability-squeezing costs like the carbon tax on some elements of agriculture, threatening the viability of canola by proposing the banning of some pesticides, and adding regulatory hurdles to the developmental marathon required for building critical infrastructure.
In various provinces, governments have sometimes set their sights on economic growth, then hamstrung it with growth-hobbling measures like Manitoba’s infamous 2000s anti-hog barn regulations.
It’s as if there’s no plan to get from lofty goals to actually establishing the industrial base needed to achieve them. Guess what? There isn’t one. At least not a real one.
For whatever vague policy papers are written and pronouncements made setting out certain goals, if they aren’t backed by mechanisms to bring them off, they’re just well-meaning platitudes, not a strategy.
There’s lots of talk within governments between departments and between political, policy and regulatory people, but it feels now like entrenched interests are pushing their particular agendas first and only grudgingly modifying them if enough fuss is made by other players. Any co-ordination with bigger strategies seems limited or non-existent. Hence the problems with carbon tax impacts on farmers and the threat to neonicotinoids.
My fellow Western Producer reporter Robert Arnason and I took a look at elements of this two weeks ago, in the Death by a Thousand Cuts package, focusing specifically upon how small but numerous cost increases upon farmers are squeezing the profitability out of Prairie farming, which is a grave threat to productivity-boosting investment. If farmers can’t make money, they will manage what they have as well as they can, but are unlikely to pour in the resources needed to maximize potential production. They’ll buy fertilizer, but maybe not install something like a new data-based farm management system or automated systems.
As much as there are incremental costs added to farm production, farmers will partially respond by incrementally reducing investment.
There’s been lots of talk recently about whether or not Canada should re-embrace an industrial policy (IP), a discredited approach to favouring various companies or industries, due to the global rise of protectionism and power-based trade politics.
The type that focuses on “picking winners and losers” is fraught with peril and moral hazard as governments favour some producers rather than others and put the taxpayer on the hook for bad calls made by politicians and bureaucrats.
Some worry that the hefty federal support for the Merit Functional Foods plant in Winnipeg is an example of the risks of IP.
But there is a more benign form of IP, at least as far as agriculture is concerned. It involves governments favouring an economic sector and assisting its development.
While that can be equally as fraught with danger as picking specific company “winners,” since industries can become redundant as technology evolves, there is no question that Canada supports having an agriculture industry, and with so much farmland, Canada can’t help but have a major farm sector.
With so much farmland, water, infrastructure and so many experienced commercial farmers, Canada is going to be home to a massive agriculture industry no matter what. The question is: will it be a profitable industry or a moribund drag on the economy? Will Canada have a competitive edge in agricultural production, or merely a comparative advantage?
So, setting bold targets for agricultural production and export growth makes sense for Canada. But for that vision of a profitable, vibrant, booming and growing industry to become reality, one that enriches the nation, Canada needs to embrace an export competitiveness policy that ensures nothing thoughtlessly hampers its development. Without that, it’s just a bunch of words.