Agri-food policy makers seek to combine research and innovation to boost sector to global prominence

Mark Henderson
June 14, 2017

The Advisory Council on Economic Growth (ACEG) has spurred an outpouring of interest and innovative activity for adding value and expanding global markets for Canada’s agricultural and agri-food sector, with a follow-up report urging the government to establish an Agri-Food Growth Council and inter-departmental task force to provide leadership and alignment.

Led by McKinsey and Co managing director Dominic Barton, the ACEG report highlighted the sector as one of eight with “a strong endowment, untapped potential and significant global growth prospects”. The report pushes for the removal of policy barriers and for addressing market challenges as has been done in other countries like the UK, US, New Zealand and Australia.

The report pitches the agri-food sector as a pilot that convenes public and private stakeholders to identify obstacles, set an “inspiration” (vision plus quantified goals) and recommend actions. To support the sector’s growth, the pilot would be backed by a “toolkit” consisting of an infrastructure bank, a foreign direct investment bank and a method for catalyzing “innovation marketplaces”.

The 2017 Budget seized the ACEG’s recommendation in its new Innovation & Skills Plan, setting a target to grow agri-food exports from $45 billion to $75 billion by 2025. It also acknowledged the key role agricultural R&D can play in boosting the sector’s commercial performance and competitiveness, earmarking $70 million over six years starting this year for “agricultural discovery science”. That funding was augmented by $200 million for a new Clean Growth in Natural Resources program, a portion of which goes to Agriculture and Agri-Food Canada (AAFC) to support “expanded adoption of clean technology by Canadian agricultural producers”.

The Budget also committed to support the sector’s growth and innovation by fully reviewing rail service across western Canada, investing $10.1 billion in gateways and ports, completing the Comprehensive Economic and Trade Agreement with the European Union and expanding market access throughout Asia.

“I’m very bullish that Canada has a great future in agriculture and can rise to the occasion,” says Dr Brian Gray, ADM science and technology at AAFC. “We’re very pleased (with the Barton report)  as it provides a great opportunity in growing our exports … On the innovation side, it’s possible to move things up the value chain for export and the private sector can do this as well with R&D support.”

AAFC has a 130-year history of conducting R&D and is a major presence across Canada with 20 R&D centres and 34 farms and laboratories. With a staff of approximately 2,000, the R&D division spends $165 million on salaries alone, augmented by an $80-million operational budget (labs, experiments, travel, conferences) and a small $10-million capital budget.

“Agriculture in Canada is a complex and integrated value system with input and service suppliers, primary producers, food and beverage processors, food retail and wholesale and food services providers. From an R&D perspective, it ranges from field to fork,” says Gray, who took up his position at AAFC two years ago after four years at Natural Resources Canada as ADM of the earth sciences sector. “We have an open and transparent way of doing science focused on increasing productivity and environmental performance.”

Stakeholder views solicited

Following the release of the Barton report, the Public Policy Forum teamed up with the Canadian Agri-Food Policy Institute (CAPI) to conduct a series of eight roundtables from Vancouver to Charlottetown. About 150 sector leaders and stakeholders were invited to provide their feedback on strategy, the Barton report and ways to “build momentum and galvanize the sector around a growth agenda”.

“The Barton report is an unprecedented opportunity to jump on and make it happen. It’s been years since agriculture was on the federal agenda to this degree,” says David McInnes, principal of DMci Strategies, former president and CEO of CAPI and a strategic advisor to Canada’s agri-food system. “A strategy must include adjacent sectors such as health and the environment as their leadership is also required. Government internal processes also need to work well to maintain the momentum.”

McInnes says a great deal of alignment is already taking place and points to the agricultural-related initiatives in the latest Budget as well as the Innovation Superclusters Initiative as key drivers.

“It’s a long-term play and it’s a diverse sector with big export commodity segments and products from beef to blueberries,” says McInnes, who played a key role in the roundtable discussions and subsequent report. “Innovation adds value to food ingredients and to foreign and domestic markets by addressing big challenges like nutrition and natural capital. All require research but it must also be tied to growth and commercialization.”

According to McInnes, an Agricultural Growth Council (AGC) and an inter-departmental taskforce to improve communication and collaboration and resolve regulatory obstacles were recommendations developed in conjunction with CAPI to help establish Canada as a trusted global food leader. But he cautions that an agricultural growth strategy should be more than a government exercise with the AGC consisting of “leaders from across the entire food system”.

“While we call for the prime minister to set these processes in motion, it’s not all about government. There has to be bottom-up targets for each sub-sector … The need to act is now as the weeks and months ahead are critical.”

For the government to fully play its part, however, its research effort must expand. The report states that stakeholders see government research is “less than half of what it should be for the size of the industry” but also acknowledged that businesses must also step up, as should commodity groups.

Roundtable stakeholders also stressed the need for “timely access to new technologies such as drones, robotics and automation” and that Canada’s role in global food security must embrace “technology, the bio-economy, genomics and input sectors, such as seed, fertilizer and pesticides”.

Canadian Agriculture & Agri-Food Snapshot
Employment 2.1 million
Sector Revenue (2014) $108 billion
Percentage of GDP  6.7%
Global Agriculture Export Ranking  5th
Global Agri-Food Export Ranking  11th

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