Canada should aim for a higher ranking among agrifood exporters

Having inspired the agrifood industry to aim for a bigger role in feeding the world, Dominc Barton has spelled out four growth barriers and four building blocks the sector needs to deal with to succeed.The barriers are an underdeveloped value chain, low productivity, trade impediments and regulatory obstacles to trade with the United States, he told a recent conference organized by Canada 2020. The way to deal with them is to aim to become one of the three main food exporting countries and rally public and private support for increasing growth in the sector.As well, agrifood needs to launch bold export pilot projects and work to complete the recommendations for the sector from the federal Advisory Council on Economic Growth, set out in a 2016 report mostly now called the Barton report.Barton's call to action reflects the main themes in the recent report of the Canadian Agri-Food Policy Institute (CAPI) on what Canada needs to do to reach the $75 billion agrifood export target by 2025 set in the 2017 federal budget.Barton told the 2020 conference that even with the challenges, both the agriculture and the food and beverage sectors have posted higher growth rates during the last five years than any other sector of the economy.The value chain problems are that Canada only processes 50 per cent of its agriculture output, which is linked to a lack of investment in processing infrastructure.The sector also has to contend with a lack of economies of scale in parts of agriculture, he said. Limited rural Internet broadband service and a focus on risk management over productivity enhancement are other drawbacks.The country also lacks preferential trade agreements with China, India and Japan and the free trade deal with Europe has yet to be fully implemented. As well, “growing regulatory obstacles to trading with the U.S. have added substantial burdens to agrifood companies in the last decade.”Barton wants Canada to aim for an eight per cent share of the agriculture products trade by 2027 compared to the 5.7 per cent it now has. That would put it in second place behind the U.S. and ahead of China, the Netherlands and Brazil.At the same time, it should aspire to fifth place in food products behind Germany, the U.S., the Netherlands and France, he said. That would give it a 5.6 per cent share of world trade.Canada has the capability to face the challenges including abundant natural resources, strong research capacity and a sophisticated consumer base that stimulates product development, he said. The sector is full of early adopters of new technology, it has reliable access to capital and inputs, the lowest use of pesticides per acre and political stability that encourages investment.Agrifood already accounts for 8 per cent of global GDP and has the second growth rate behind wholesale and retail trade and ahead of manufacturing, construction, transportation and energy and mining, he said.At the same time, it faces major international constraints including a projected 30 per cent water deficit by 2030, more than 20 per cent of arable land is degraded, which means another 175 million to 220 million hectares of cropland will be required.He said climate change could lower agrifood productivity internationally by 3 to 16 per cent by 2080. Annual productivity increases have slipped to 1.2 per cent from 2.2 per cent in the 1960s while energy costs for fuels and fertilizers account for 50 per cent of a farmer's cash costs. That figure rises to 63 per cent for U.S. corn production.Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.