Canada's agrifood sector faces big hurdles

  • National Newswatch

There are some major hurdles in the way of Canada reaching the 2025 target of $75 billion in agrifood exports, says Murad al-Katib, President and CEO of Regina-based AGT Food and Ingredients.While many people now understand that agrifood is the No. 1 employer in Canada, not so well known are the barriers to growth it faces, he told the Canada Day event in Ottawa. They are an underdeveloped value chain, low productivity, a lack of trade agreements and U.S. regulatory moves.Odds are pretty good we'll be hearing a lot more on these topics as al-Katib is on the interim board of Protein Industries Canada and is chairman of the federal agrifood strategy table created by Industry Minister Navdeep Bains in early February.“Canada processes only 50 per cent of its agriculture output,” he said. A major contributor to that deficiency is a lack of investment in processing infrastructure.The sector also suffers from low productivity because of a failure “to achieve economies of scale on farms in some sub-sectors,” he said. Limited rural Internet bandwidth is delaying the deployment of productivity-enhancing technologies. The government focus on risk management rather than productivity enhancing investments isn't helping.The lack of trade agreements with China, India and Japan hurts Canada in three of the five biggest potential export markets, he said. The Comprehensive and Progress Trans-Pacific Partnership Canadian has agreed to sign will at least remove Japan from that list once it's ratified. Al-Katib said the lack of full implementation of the free trade deal with Europe is another headache for exporters.The regulation problem for exports is the growing number of obstacles to trading with the United States, “which has added substantial burdens to agrifood companies in the last decade,” he said.Dealing with these obstacles would go a long way to empowering agrifood to be an even greater contributor to Canada's well-being, he said. While it's the largest employer in Canada, its 6.7 per cent contribution to the GDP leaves it trailing education with 1 per cent of employment and 13.7 per cent of GDP, manufacturing with 1.7 per cent of employment and 10.5 per cent of GDP. Energy and Renewables has 0.95 per cent of employment but 6.8 per cent of GDP.If Canada can overcome these challenges, it would be in position to ask if the $75 billion export goal is bold enough, he said. “We need to think a lot more about where we could be in 10 to 20 years from now.” Canada also needs to think a lot about the global challenges of food security. “We need to produce in the next 40 years the equivalent of all of the food produced in the last 10,000 years.”Another shortcoming facing agrifood is the lack a 50-year plan for developing transportation infrastructure that would assist with development of exports, he said. Al-Katib served on the 2016 review of the 2016 Canada Transportation Act that spurred Transport Minister Marc Garneau to attempting a major overhaul of transportation policy.He would also like to see agrifood expand the scope of data that's already collected on the sector's performance to help identify shortcomings. A model for what he's proposing is the Canada Centre for Transportation Data announced in the 2017 federal budget and still under development by Transport Canada and Statistics Canada.He also said farms are becoming larger with the four Western provinces having an average farm size of more than 1,000 acres while the rest of the provinces are at less than 500 acres. Ontario is 249 acres.Canada currently stand 6th globally in exports of director from farm agriculture products but the 5.7 per cent market share could easily be boosted to 8 per cent, which would put it second behind the United States' 14.8 per cent market share.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.