Ottawa-Meeting the future demand for food in the world could become a challenge if the stagnation in agriculture productivity growth in Canada is not addressed, says Farm Credit Canada.

After peaking in the 1990s and early 2000s at around 2 per cent per year, productivity growth in Canadian agriculture has stagnated, which threatens the country’s ability to meet future demand for food and Canada’s competitiveness in the global food system.

Productivity is a key indicator of how efficiently inputs – like labour, equipment, land and feed – are converted into outputs, FCC said. Sustained productivity growth is essential for achieving long-term sustainability, profitability and resilience in the agricultural sector.

In a Thought Leadership statement, FCC estimates that restoring annual agricultural productivity growth to the historic level of two percent could boost farm incomes by up to $30 billion during the next decade.

“However, the benefits extend far beyond the farm gate. Agriculture is a cornerstone of Canada’s economy, with the agriculture and agri-food sector accounting for 1 in 9 jobs and roughly 7 percent of national GDP in 2024.

“Revitalizing productivity growth in agriculture could generate significant spillover effects – enhancing Canada’s overall economic health, food security, and national wellbeing.”

The beyond the farm economic benefits of boosting agricultural productivity could rival the farm income benefits nearly dollar for dollar.

FCC’s Thought Leadership team used Statistics Canada’s input-output multipliers to estimate the spill-over effects of increased productivity growth in agriculture and understand the opportunities for the overall economy.

“This boost in agricultural productivity growth would also support the creation of an estimated 22,920 new jobs and generate $12 billion in labour income. These employment benefits will spill over from primary agriculture into adjacent industries and represent expanded opportunities throughout the entire value chain, from equipment manufacturing and input supply to transportation and value-added processing.”

Revitalizing productivity growth in agriculture will deliver a cascade of additional economic and social advantages for all Canadians, FCC said. “It promotes food security and healthy rural communities. It also enhances the resilience of our food system in the face of growing global challenges associated with volatile growing conditions and shifting terms of trade.”

Multiple factors contribute to the current slowdown in Canada’s agriculture productivity growth, including underinvestment and slow uptake of new technologies, FCC said. “Addressing these challenges represents a generational economic opportunity, both on and off the farm.”

As there is no one-size-fits-all solution to boosting agriculture productivity, a portfolio of solutions is needed to reignite productivity growth, including:

-Increased investment in R&D and commercialization, both at home and abroad;

-Fostering innovation across the sector, by supporting strategic partnerships and building capacity;

-Harvesting low-hanging fruit by encouraging adoption of existing under-utilized technologies on farms.

“Driving investment and innovation in Canadian agriculture will equip our food system to meet future needs and drive economic growth. It will ensure the long-term sustainability and profitability of the agricultural sector, and foster a thriving, resilient and innovative food system that benefits all Canadians.”

This news report prepared for National Newswatch