Canada can be an ag-tech superpower, but it will take political will and supportive government policy: CCA report

Canada can be a global superpower in agricultural technology but only with targeted government funding and supportive policies, says the chair of a new Council of Canadian Academies (CCA) expert panel report on “atypical” food production.

The federal government could start by publicly declaring a commitment to agriculture and ag-tech, but Canada really needs a national agricultural strategy, said Dr. Lenore Newman, PhD, (photo at right) director of the Food and Agriculture Institute and research chair in food and agriculture innovation at the University of the Fraser Valley in Abbottsford, B.C.

“We can’t just leave this [effort] to venture capital and the free market. We have to support it as a national priority,” she told Research Money.

“We do not want to rely on the rest of the world for food. That is a national security issue,” Newman said.

The National Research Council of Canada asked the CCA to consider the areas of scientific and technological advancement in atypical food production that will most contribute to Canada’s national food security within the next two decades.

The CCA’s expert panel defined atypical food production technologies as those that enable precise control over food production through the manipulation of environmental factors.

The panel’s report, The Next Course, explores a range of promising food production methods – from controlled environment agriculture facilities like greenhouses and large-container gardening, to processes such as cell-cultured meat and precision fermentation – as well as the conditions that improve their chances of success.

Newman said one of the 11-member panel’s conclusions is that new and innovative food production technologies cannot by themselves solve the problem of food insecurity in Canada.

The roots of food insecurity have to do with Canada’s housing affordability crisis which is “unprecedented in the Western world in modern history,” she said. “Until that is fixed, nothing else really matters from a poverty point of view.”

In other words, the high cost of housing and inflation means fewer dollars are available to buy food – especially for low-income families and individuals. “Any gain we make that makes food cheaper is being eaten up by housing costs.”

On the positive side, the expert panel’s report found that atypical food production is a massive economic opportunity, Newman said.

Adding atypical food production to conventional crop and livestock production will help Canada diversify the nation’s food system and mitigate worsening challenges, such as geopolitical instability, deglobalization and the unpredictability of climate change, she said.

“We want to be an agricultural technology superpower because we’re [already] an agricultural superpower,” she added.

“As an agri-food superpower, Canada has the potential to be a world leader in these new methods of food production but is currently falling short,” the report says.

Food security is achieved by investing in a portfolio of food and agriculture industries, the report notes. “In food systems, diversity is strength. Canada needs to be a living laboratory where the world’s food future is born.”

One of the main takeaways from the CCA’s report is that making Canada a global leader in atypical food production won’t happen in a vacuum, Newman said. “You need labour, infrastructure, a supportive policy environment."

Even though agriculture both on land and in the oceans is one of Canada’s intrinsic strengths given the country’s natural resources, Canada sometimes doesn’t give enough attention to agriculture compared with the Netherlands, Japan, the U.S. or other countries, Newman noted.

“The policy environment matters and it can really supercharge this [effort on atypical food production],” she said.

According to the CCA’s report, the benefits of atypical food production will depend on: enabling technologies such as genomics, automation and artificial intelligence; adequate resources, including energy, water, broadband internet and labour; and successful resolution of policy issues involving land use and food safety.

Atypical food production technologies still need work

The expert panel looked at “controlled environment agriculture” (CAE) technologies such as greenhouses, indoor gardening, large-container gardening and other CAE food production systems.

Newman said the panel expressed “measured enthusiasm” for CAE technologies but pointed out that Canada still needs to figure out the best way to design and deploy such technologies.

Canada does have to participate in CAE technologies because the country is losing food supplies from California, Mexico and other places due to climate change, she said.

CAE technologies are working well in countries like Japan and the Netherlands because they have strong government support through policy and funding to kick start the industry, the expert panel found.

But in the U.S., over the last few years a venture capital model to support the industry hasn’t been working. CAE technologies have a very high upfront cost and the return on investment is too slow for VC investors, Newman said.

“So we had this boom-bust [in CAE technologies] in the U.S. that isn’t helpful,” she said. For Canada to succeed in this area, she added, the government has to provide financial and policy support to help the industry grow, rather than rely on venture capital which isn’t a good fit.

CAE technologies typically require a lot of energy. So the other thing that’s needed for a successful CAE industry is having a green, low-carbon electricity grid, Newman said.

“Any application of technology or implementation of CAE facilities is reliant on enabling conditions, such as adequate infrastructure, a trained workforce, supportive government policies, and in the case of facilities intended to provide produce to Indigenous communities, community buy-in and leadership,” according to the panel’s report.

The panel also looked at Canada’s potential opportunity in alternative proteins, which include plant-based proteins, precision fermentation of molecules (for example, to produce cultivated meat), and cell-based protein production.

Canada has a good animal protein production system but it can’t be scaled up to supply protein to the world, the panel found. The demand for animal protein has doubled in the last 30 years.

“And if it doubles again, there’s literally no way to provide [enough animal protein],” Newman said. “So we need other technologies.”

However, it is early days for precision fermentation and cellular agricultural technologies, she said. Cell-based protein production, for example, still has numerous “little problems,” rather than one grand technical challenge, to be solved.

These problems include economies of scale that demand large industrial facilities, consumer preferences for familiar products, and their expectations of novel products in terms of price, taste and texture.

For example, Singapore was the first country to approve the sale of cell-based meat (sample in photo at right, left of a regular piece of meat) with Huber's Butchery in Dempsey Hill being the only restaurant in the world selling lab-grown meat back in early 2023. 

But in March this year, U.S.-based Eat Just put its lab-grown meat production at the Bedok facility in Singapore on hold, while Huber’s Butchery stopped offering the product in December last year.

A New York Times article in February detailed the decline of the industry – one that had a bright start with investors pouring over US$3 billion into the industry between 2016 and 2022. 

Canada should participate in developing precise fermentation and cellular technologies, “but it’s going to take investment, strategy and not a bunch of little one-offs [projects] to get us there,” Newman said. “So let’s get some money on the board and solve some of these little problems.”

Government needs to “double down” on supporting ag-tech

The agriculture and agri-food system in Canada employed 2.3 million people in 2022 while generating about seven percent ($144 billion) of Canada’s gross domestic product, the panel’s report notes.

Of that, over $36 billion stems from work taking place “within the boundaries of a farm, nursery or greenhouse.”

Total farm cash receipts have grown every year since 2011, achieving a record $100 billion in 2023. At the same time, the 2021 Census of Agriculture found that in 2020, farmers, on average, incurred 83 cents of expenses for every dollar in revenue – making for thin profit margins.

In 2023, Canada ranked eighth in the world behind the U.S., Brazil, the Netherlands, Germany, China, France, and Spain in total exports of agriculture and food products, including seafood and processed foods.

In terms of produce, Canada is a net importer; $6.8 billion of fresh and frozen fruit were imported in 2021, compared with $0.9 billion exported, while $3.6 billion of field vegetables were imported and $0.7 billion exported.

While Canada has experienced considerable “total factor productivity” (TFP) growth in agriculture over the past 40 years, the growth rate declined over the last decade and is expected to continue to decline.

TFP can be defined as “the amount of agricultural output produced from the combined set of land, labor, capital and material resources employed in farm production.” In short, increasing TFP means more food can be produced with fewer resources (improving environmental sustainability), making it more abundant and cheaper with greater revenues for producers (improving economic sustainability).

Calculations by Farm Credit Canada find that returning TFP growth to its peak levels would result in as much as $30 billion in net cash income over 10 years compared with the status quo projections.

Food production based on atypical technologies holds promise for supporting the diversification of Canada’s food system, “but the economic and environmental sustainability of these technologies face various challenges,” the CCA’s report says.

Despite these challenges, Canada needs to participate in developing and deploying atypical food production technologies, Newman said. “We’re a global food powerhouse and we want to stay that way.”

The U.S., for example, will often publicly proclaim it is the global leader in food production and plans to remain No. 1. The Netherlands, where two of the country’s top industrial sectors are agriculture-focused, engages a “triple helix” model of government, industry and academia to advance agriculture and ag-tech.

In contrast, in Canada “the regulatory and policy environment is complex, and food lacks a policy home,” the CCA report says.

There are opportunities to use policy to enable and encourage growth in atypical production (for example, zoning to support controlled environment agriculture facilities), the report notes.

“At the same time, coordination across the policy landscape (including among orders of government) is needed to ensure new initiatives meet their goals and do not create new barriers or have unintended consequences in local food systems.”

The federal government needs to double-down on agriculture and establish solid, sustainable funding to support agriculture and ag-tech, Newman said.

“One of the missing things in Canada is just the will to do it [make a commitment to the future of agriculture] from the federal government,” she said.

“We need to come out and say, ‘We’re going to do this and we’re going to do it because the world is going to be hungry going forward, with climate change being unchecked.’”

Addressing Canada’s food insecurity problem

The CCA’s expert panel cited some disturbing statistics from various studies on food insecurity in Canada, including:

• 18 percent of families in the provinces experienced food insecurity at some point in 2020, affecting approximately 6.9 million people across Canada.
• Of this group, 1.9 million people (five percent of families in Canada) were considered severely food insecure, “missing meals, reducing their food intake and, at the most extreme, going days without food.”
• Provinces with the lowest rates of food insecurity were Quebec (14 percent) and British Columbia (17 percent), with the highest rates in Newfoundland and Labrador (23 percent), New Brunswick, and Alberta (both 22 percent).
• Food insecurity is particularly acute in Nunavut, where almost half the population is moderately or severely food insecure. The rate of food insecurity among Inuit is linked to a range of interrelated factors, including poverty, the high cost of living in the North, climate change and policies and food systems based in colonialism that are ill-suited to Inuit communities.

Addressing Canada’s food insecurity problem wasn’t within the mandate of the CCA’s expert panel. However, Newman pointed out that a big challenge in the North is the lack of infrastructure to implement the kind of technologies that could improve food insecurity.

The North lacks road infrastructure, rail infrastructure which is particularly important to the food system, proper electrical grids, reliable water supplies and high-speed, dependable internet access, she said. “All those things are needed before we can really tackle this problem [of food insecurity].”

The idea of building a Northern transportation corridor has been around since the 1970s, but such a corridor is really needed now, Newman said. The North can no longer rely on transporting food and other vital goods via freighters, barges, fly-ins and “ice roads that are increasingly not there” due to climate change.

“[Building] infrastructure is what the government could do best,” Newman said. “We need better Northern infrastructure and then we can empower Northern communities to increase their food security because they can actually start businesses and do other things.”

Says the CCA’s report: “The future of food and agriculture cannot continue on the same path, and increased diversity through innovation in the food system is required to ensure that people in Canada can access the food they want and need.”

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