Ottawa-The slowdown in agriculture productivity growth in Canada during recent decades can be reversed by addressing efficiency, scaling production and technical progress, says a report from Farm Credit Canada.

Canada’s high productivity growth in the 1990s and 2000s was driven in large part by the adoption of precision agricultural technologies and the passing of the North American Free Trade Agreement. While those actions increased trade flows, investments and the spread of productivity-enhancing innovations, trade-and-tech-driven productivity growth has stalled.

FCC says the two key elements in the slowdown were underinvestment and slow adoption of new technologies. “Canadian agriculture has lagged behind other sectors and countries in research and development spending, venture capital investments in commercialization and the adoption of new technologies.”

However, there is a $30-billion opportunity to revitalize Canadian agricultural productivity growth through enhancing productivity, profitability and sustainability, which are inextricably linked. And the pathways of efficiency, scaling production and technical progress can return Canadian agriculture to its previous peak rate of agricultural productivity growth.

Canadian agriculture is currently at a crossroads. “There’s an opportunity to launch a bold transformation towards sustainability, prosperity and productivity, all driven by innovation. But that can only happen if the entire sector joins the effort.”

FCC said its report on the slowdown “can help start the conversation. But the real power lies in the hands of farmers and industry leaders.”

“Our industry has a generational opportunity to demonstrate leadership on the global stage and show the world what Canadian agriculture can achieve. Canada has long been a standout among global food producers.”

“Over the past half-century, Canadian agriculture has enjoyed significant productivity growth due to better farm management, input efficiency and technological innovation.”

“But after peaking at two percent annually in the 1990s and early 2000s, productivity growth in Canadian agriculture has since decreased. Should the status quo continue, it will very likely continue to decline.”

FCC predicts that revitalizing agricultural productivity growth in Canada could unlock $30 billion in income for farmers in the coming decade, generating up to $31 billion in GDP and supporting thousands of new jobs.

“We measure productivity, and its rate of growth, at the farm level and for the entire industry. It’s a measure of how efficiently inputs – such as labour, equipment, land, feed, and fertilizer – are transformed into outputs, such as livestock or crops. We aim to grow productivity because it allows us to increase output using fewer resources, at lower cost, and producing less waste.”

Productivity growth is critical if Canada is to have a strong and sustainable agriculture sector. It supports job creation, wage gains, trade competitiveness, and food affordability. It supports farmers’ ability to adapt to changing production conditions and stay profitable in the face of evolving risks and uncertainties – of which there’s no shortage in 2025.”

FCC focuses total factor productivity (TFP) to evaluates all outputs – such as crop and animal products – against all inputs. Among other aspects TFP captures the impact of technological changes, and how they can cause inputs to work more efficiently together.

This news item prepared for National Newswatch