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  Advisory Council recommends unleashing agri-food growth and potential

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  • OTTAWA -- The latest Advisory Council on Economic Growth (Council) report recommends unleashing growth and potential in the agri-food sector, through several changes, including regulatory.

    The report suggests a need to, "Launch an ag-food pilot by convening private and public sector stakeholders, identifying major obstacles to growth, setting an aspiration (a vision and quantified goals), and recommending concrete actions. The Council's recommendations provide a toolkit' that should be leveraged to support growth -- e.g., a federal infrastructure bank, a foreign direct investment agency, and a method for catalyzing innovation marketplaces'." 

    In a media release, the Canadian Seed Trade Association said it welcomes the bold proposals for growth for the agri-food sector outlined in the report. The CTSA said, "Seed is the start of it all, the entire agriculture and agri-food value chain. Many of CSTA's priorities are supported in the report, including that collaboration between governments and stakeholders, and the creation of strong, supportive policies are essential to driving economic growth. CSTA agrees with the Council that more opportunities to position Canada to the global community as a source of safe, healthy and nutritious food must be identified. CSTA also supports the Council's recommendations to eliminate regulatory burden where possible as the seed industry innovates faster than we can be regulated... Setting aspirational and quantified goals are part of the Council's plan to leverage ag-food sector growth and potential. This is an exciting approach and CSTA member companies are ready to lend expertise and to partner with governments and stakeholders to set these goals and bring them to reality."

    However, the Council was careful to state it is not suggesting that growth be pursued at all costs. "Some well-designed environmental or labour regulations, for example, may achieve their intended objectives and also reduce growth. In many cases, such regulations are appropriate; in other cases, the regulations are excessive or suboptimal in their design, creating unnecessary barriers to growth. Details within each sector need to be carefully examined."

    The report recommends government "begin developing strategies to clear a path for growth of high-potential sectors by studying the endowment, or starting position, of each sector and comparing our strengths and weaknesses with other countries and with significant trends in the market for the sector's products and services. Next, the government can work with its private sector partners to develop possible aspirations for the sector and to identify bold moves for helping it advance toward them quickly." Although the word "bold" is frequently used in the report, it is not defined.

    The report states that Canada's agri-food sector is among the world's largest with the United States 26.1-billion of agricultural products Canada exported in 2015, which was 5.7 per cent of all global agricultural exports. Canada is the single largest exporter of wheat, canola, and lentils, and the 11th-largest exporter of agri-food, with U.S. $19.1-billion of these exports in 2015 -- 2.8 per cent of the global total. It also leads the way in niche products like maple syrup.

    The sector is one of Canada's largest employers and economic engines, contributing 2.1-million jobs and 6.7 per cent of GDP. These jobs are widely dispersed across rural and urban areas, are a force for economic inclusion and support many new Canadians. Some require skilled workers with a high degree of digital literacy.

    The Council said Canadian agri-food has averaged an annual growth of 9.5 per cent over the past five years, and has advantages, including a wealth of fresh water and arable land. Canada's per-hectare use of pesticides is among the world's lowest, appealing to consumers, and operates in favourable business and economic conditions. As well, Canadian institutions, political stability and international goodwill encourage foreign investment and cross-border trade, notably with the major market of the U.S. Companies have affordable, reliable access to capital and inputs (fertilizers, feed, and seeds) and a healthy network of university research and development facilities.

    The report summarizes that Canada is in a good position, saying, "Many middle-class consumers also want proof that their food has been produced in a safe and environmentally sustainable way. Land degradation, water scarcity, urban sprawl, climate change, and political and social instability could make it harder for many countries to produce the food they need and are likely to place a premium on agricultural products from regions where environmental and labour conditions are considered good."

    Identified obstacles include the need to move up the food chain, meaning more processing of food done in Canada, which currently processes only half of its agricultural output. Underdevelopment in the food-processing sector partly stems from historical actions, such as lack of investment in processing infrastructure, and a regulatory environment with lengthy permitting processes, supply-management boards, etc. There is also underinvestment in transportation infrastructure, according to the Council, which it states compounds the difficulty to aggregate food-processing supply chains across the country's vast land mass, resulting in a greater reliance on commodity trade.

    Continued from page 25

    The report also discussed economies of scale which it says could be realized by larger farm operations, although it did not address the affect on rural communities of expanding crop lands at the expense of reducing homes and landowners. The report also suggested a need for trade agreements with additional countries, including India, China and Japan.

    "The report of the Advisory Council on Economic Growth sets out a bold path forward," said Brent Derkatch, CSTA President. "We're calling on all our partners to take the courageous action needed to unleash the potential growth of our industry."

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