It’s time to update the Barton report, CAPI says

Agrifood exports face many non-tariff barriers

Ottawa-The Barton report inspired the farm and food sector back in 2016 by recognizing its importance to the Canadian economy but changing conditions call for a new version of its approach, says Tyler McCann, Managing Director of the Canadian Agri-Food Policy Institute.

As the report never gained the traction many in the sector hoped for, it may be time to set aside the comfort of the status quo and figure out what the next version of Dominic Barton’s vision should be, McCann said.

“For that vision to have success it cannot be built around the need for change in public policy. It needs to be built around changes that the private sector can deliver.”

Otherwise, 2024 could be another year of no improvement and sooner or later, it will become clear “that while things have been happening in Canada, the world has changed around us and passed us by.”

McCann said the need for change certainly shows in the farm cash receipts (FCR) remaining the same in the third quarter of 2023 as the same period of 2022. That was significantly lower than the fourth quarter of 2022 and the first quarter of 2023 because of the softening of global commodity prices.

“The era of a slow, continuous increase in FCR appears to be replaced by an era of volatility and risk. This calls for a change in how we manage risk on the farm, throughout the value chain, and across the entire sector.”

The lower prices triggered payments from government program that were 65 per cent higher in the first three quarters of 2023 compared to the same period three years prior, and more than double what they were in 2013, he said.

“While farmers are benefitting from increased public support in this new era of risk and volatility, the increasing cost of public risk management programs may soon collide with the need to reduce government deficits. There is a need to change how we think about public programs and whether they effectively deliver the risk management protection farmers need.”

Another challenge lies with a slowing of the agriculture productivity growth rate in the face of a need to sustainably produce more food. After increasing for three decades, Canada’s total factor productivity growth slowed in the last decade, according to the Global Agriculture Productivity Initiative at Virginia Tech, he said.

“Farm Credit Canada recently released an analysis showing that boosting productivity could increase farm incomes in Canada by $30 billion over the next 10 years. Productivity growth is not something that changes overnight. It requires both long-term investments and commitments. There is a need to change how we grow productivity and the role it will play in the future of Canadian agriculture and food.”

Capital investments in Canadian agriculture and food have stagnated following significant increases from 2015 to 2020. Investments in food manufacturing are double what they were 10 years ago but have remained effectively unchanged over the last three years.

“Capital investment is a measure of growth and confidence in Canadian agriculture and food, and it is not increasing. There is a need to change how we think about the role of value-adding in Canadian agriculture and food and how it will drive the sector forward in the coming years,” McCann said.

Canadian agriculture and food exports are facing increasing headwinds caused by non-tariff barriers created by importing countries. “The rules-based trading system that has been essential to the success of Canadian agriculture and food is becoming increasingly fragile.”

The number of sanitary and phytosanitary measures and technical barriers to trade is on track to be 75 per cent higher than in 2013.

“These increasing trade pressures do not recognize the evolving impact of efforts to incorporate sustainability and trade. There is a need to change our approach to trade to ensure Canadian agriculture can succeed in a much less friendly global trading system.”

While talk about these and many other issues continues to increase, “what is missing is action – and this is what is needed in 2024.”

The lack of changes in Business Risk Management programs is because the federal and provincial governments cannot agree. The decline in productivity growth is because the public or private sector is not investing enough in research and development “and that is because of Canada’s lacklustre regulatory environment. The stagnation in capital investments is because multinational companies are investing in Mexico, China and other lower-cost markets.”

Overall, the fundamental barrier to change appears to be a missing shared vision for the sector, McCann said.

This news report was prepared for National Newswatch.


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