CAPI Report: Optimizing Growth in the Agri-Food Sector

In March 2016, the Minister of Finance tasked the Federal Government’s Advisory Council on Economic Growth (ACEG) with finding policy directions for future strong and sustained economic growth. The agriculture and agri-food sector was selected as one of the six sectors identified to lead economic growth over the next decade, with a target of $75 billion in agri-food exports by 2027. The Canadian Agri-food Policy Institute (CAPI) and the Public Policy Forum (PPF) responded by starting roundtables with industry members in March 2017. But, after the completion of the roundtables, CAPI decided to hold “Barton Forward: Optimizing Growth” workshops to further investigate major questions. These workshops were focused on the quality of future growth rather than its scale. Though the workshop report rarely references organic farming by name, the group’s focus on topics such as sustainability, healthy food, and regulation improvements is closely tied to the organic sector.

The workshops discussed the attainability of the growth targets, highlighting that the sector’s export expansion will depend significantly on export market growth. Due to predicted slower global population and income growth, agri-food trade is expected to continue to grow in the future, but at a slower rate. Canada has a reputation for clean, safe, healthy and high quality products, which may prove advantageous on the global scale. Potential challenges to export growth include competition in the global market, uncertainty among trade agreements such as NAFTA, and the modernization of both the sector and trade agreements.

Another discussion point was the challenge of achieving growth while maintaining and improving natural capital. Canada’s agri-food sector could provide solutions to the effects of climate change by improving the ability of plants and soils to sequester carbon. While the current total agricultural production value is more than double than what it was in 2007, greenhouse gas emissions from agricultural activities have remained stable. In addition, there has been a decline in emissions per unit of output. This decrease was mainly due to cover crop use, reduced tillage, improved animal genetics, and the introduction of the 4R Nutrient Stewardship program. Some challenges include the lack of consensus on natural capital policy, development of agricultural land, inequality in environmental improvements across the country, and confusion and costs surrounding sustainability. Some proposed solutions include more industry-government collaboration, investment in research and development, and raising awareness about the benefits of sustainable production.                                                          

The workshops also explored the compatibility of the growth targets with other policy objectives. The workshops took place while the National Food Policy, the Healthy Eating Strategy, the Canadian Agricultural Partnerships, and the Pan Canadian Framework on Clean Growth and Climate Change were being developed. These programs encourage solutions such as food affordability, nature conservation, healthy eating, labelling improvements, funding for research, and funding for environmental sustainability. These objectives are linked to organic farming, and the workshop reviewed the future possibilities for this sector. Changing consumer preferences for organic and local food could displace imports and provide business for small-scale farmers. Challenges for the organic industry however, include the inconsistency of organic regulations from province to province and the less competitive prices of small-scale companies. Promoting the health benefits of eating organic could also create the perception that conventionally-grown food is unsafe or unhealthy. The proposed solutions include modernizing organic regulations and acknowledging that both large- and small-scale food systems have value.

The workshops also explored the role of science and innovation in the agri-food industry, examining how we can make the best use of new science in improving natural capital, increasing industry competitiveness, and providing domestic and international markets with high quality products. Canada has significant scientific research capacity, and funding could be directed toward new crop, livestock, and technological improvements with environmental and economic benefits. There are some challenges however, such as the skill shortages in some agricultural-related science fields, unclear leadership, underfunding, and the need to preserve public trust.

The workshops concluded that while the sector has what it takes to achieve the growth targets, more needs to be done to ensure quality growth. This growth would require the maintenance of natural capital, the enhancement of Canadians’ health, and the preservation of public trust. Increased accountability and authenticity should demonstrate the value of buying ethically-grounded, healthy, and sustainable food.

Read CAPI’s Full Report.

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