National Newswatch

Trade problems and weather will continue to trouble the sector as well.

Ottawa – The pandemic that won’t go away was undoubtedly the single biggest shock to the agrifood system last year and its impact will continue to be felt in 2021, says Farm Credit Canada.

In an early January 2020 outlook, it selected climate change, protectionism and automation as having “the most potential to not only significantly reshape Canada’s agriculture and food industry, but also disrupt the global economy,” J.P. Gervais, FCC’s chief agricultural economist, says. Then along came Cvoid-19.

While those disruptors are still at work, the global pandemic “tops our list of most significant trends to watch in 2021,” Gervais said.

The upheaval caused by the pandemic “continues to test global supply chains and disrupt trade patterns around the world, as countries apply various measures to stop the spread of the virus. It has slowed or shuttered momentarily food processing facilities, disrupted movement of Canadian agriculture commodities and processed food to several export markets, and significantly altered consumer buying habits, especially when it comes to in-home dining and grocery shopping.”

At the same time, geopolitical tensions added to the uncertainty brought on by the global pandemic, shifting trade flows, he said. “To make matters worse, climate change continued to wreak havoc in agriculture, spawning extreme weather events in parts of the world. All told, 2020 will go down as a year of major disruption on almost every front.”

Gervais said the agrifood sector performed well further entrenching it “as one of the world’s most trusted and reliable suppliers of food and agriculture commodities. The pandemic has only heightened consumer demand for locally sourced food, accelerating what was already a pre-pandemic trend. At the same time, the needs of major food importers and our key export markets will grow even if economic uncertainty continues to prevail in 2021.”

There are clear signals pointing to strong domestic and global demand, he said. “Higher savings and pent-up demand could drive growth in red meat consumption, which could be bolstered by the possible reopening of food services in 2021. Globally, weather challenges could strengthen import demand of major grains, oilseeds and pulses.”

High-income economies, such as Japan, the United States and the European Union, “continue to have the potential to further tap into Canadian exports. China – given its size and growing economic strength – also holds potential for opportunities.

“If the stars align and we are able to quickly turn the corner on this pandemic in 2021, we could see an economic rebound that allows us to mostly recover from last year’s 4.2 per cent global economic contraction,” Gervais said. “By meeting the needs of importers during a pandemic, Canada has an opportunity to further strengthen its position as one of the world’s leading agriculture exporters.”

The big question remains how the health and economic fallouts from the pandemic will intersect with climate change and geopolitical tensions to impact agricultural production and trade this year.

“While there are many challenges on the road ahead, there are also many opportunities for Canadian food producers and processors. “The key is to have a good risk management plan to ensure your business remains strong and viable to take advantage of those opportunities as they arise.”

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.
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