THE RAPID rise in the value of the Canadian dollar is a wake-up call to the agricultural sector and the rest of the economy.
The effect on the grain sector of the Canadian and American currencies reaching parity has been masked by the grain price rally, but the livestock sector is suffering lower returns.
To remain competitive with a strong currency requires strong productivity growth, but during the weak loonie era Canadian industry fell behind the United States in this measure.
The Canadian Institute for Competitiveness and Prosperity says gross domestic product per capita in Canada is now 18 percent behind the U.S. Two decades ago, it was only 10 percent behind.
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The good news for agriculture, according to Statistics Canada data, is that Canadian farmers have posted better productivity increases than other sectors of the economy. But farmers and the wider agrifood sector must not be complacent.
The meat sector’s problems in capitalizing on increasing global meat demand are well documented. Due to labour shortages and higher production and regulatory costs, Canada’s meat processing plants are struggling.
And the competition is not only American. Brazil, Argentina, Ukraine and other former Soviet countries all have growing agricultural potential.
To keep ahead of the pack while carrying the weight of a strong currency and first world production costs will require Canadians to use technology, knowledge and innovation.
So it was disturbing to read a Statistics Canada report that found rural Canadians lagged significantly behind urban Canadians in personal internet use.
It warned of a “digital divide” that put rural Canadians at a disadvantage. Studies show that computers and the internet are tools of productivity, helping small businesses create value by managing inventories, developing supply chains, enhancing customer relationships, improving marketing and providing information for management decisions.
A study of rural regions of British Columbia found businesses that used broadband generally increased productivity by more than 10 percent.
The rural/urban internet divide may be partly related to the older average age of rural Canadians, but the unavailability of high speed service in rural areas is also a key factor.
A Pew Research Center paper discussing the same divide in the U.S. said rural and urban people of similar social characteristics are equally likely to use the internet so long as they have affordable high speed, broadband service.
In the two years since the Stats Canada study was made, high speed satellite internet service has become more widely available.
If this does not narrow the internet use gap, then for the sake of their productivity and competitiveness, farmers must demand that planners and politicians reassess policies to ensure they encourage broadband availability and use.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
