Plans to build two pea processing plants in Western Canada have important ramifications that go beyond their infrastructure and jobs. They show how agriculture can grow and diversify in the export market.
To see why diversification matters so much, we need only to look at what’s going on in India. Canada exports about $1 billion worth of pulses to India annually —about 40 percent of our pulse exports —but there is now a tense standoff over India’s recent decision as of March 31 to force Canadian exporters to fumigate all agricultural commodities before sending them to India.
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The Pan-Canadian Action Plan on African swine fever has been developed to avoid the worst case scenario — a total loss ofmarket access.
The measure is intended to eradicate stem and bulb nematodes in grain imports and methyl bromide is the only chemical that kills pests at all stages of development.
The fumigation issue has been kicked down the road for years, in part because there is no definitive solution.
Canada now has an exemption, allowing it to apply methyl bromide to its crops upon entry into India because it’s too cold to properly fumigate. Also, as a signatory to the Montreal Protocol, which vows to stop using such products due to their effect on the ozone layer, Canada has banned the use of methyl bromide.
However, ships on the way to India now may, in fact, have their pulses rejected.
It is somewhat eyebrow-raising that the policy change comes at a time when India is expecting a record pulse harvest, and given that the Indian government has an ambitious goal of becoming self-sufficient in pulses.
The situation highlights the danger of relying too much on one market. But there is good news regarding market diversification as two European companies plan to invest in Canadian pulse processing.
The French company Roquette plans to build a $400-million facility near Portage la Prairie, Man. It would fractionate 100,000 tonnes of yellow peas annually into starch, protein and fibre.
And Canadian Protein Innovation Ltd., a German-owned company, wants to build a $75-million facility in Moose Jaw, Sask., that will fractionate yellow peas for protein and fibre that would go into pasta, snacks, candy, vegetable coatings, animal protein replacements and other industrial uses.
Research is uncovering new uses for pulse proteins in the ingredient industry. The desire by younger generations for healthier, more environmentally friendly proteins will help to drive this trend. (Pea protein may even replace animal protein in some fast foods, such as chicken nuggets.)
This heightened demand offers the opportunity for new markets and diversification.
Canada is already the world’s largest producer of peas, with 30 percent of global production. The world’s pea protein market is expected to grow by more than 13 percent per year in volume over the coming years.
In 2015, Canada exported six million tonnes of pulses valued at almost $4.2 billion. Given the success from last year’s International Year of Pulses marketing efforts and the potential for fractionation, the sky is the limit for pulses.
Prime Minister Justin Trudeau’s economic advisory panel has identified agriculture and agrifood as a potential growth sector in the coming years, in part due to the demand for less-expensive plant protein in developing countries.
If that growth includes an even more diversified customer base, all the better.
