Agricultural growth

FROM THE CEO'S DESK

Barry Senft, CEO, Grain Farmers of Ontario

IN A RECENT report by the federal Advisory Council on Economic Growth, chaired by Dominic Barton, agriculture was highlighted as one of the industries that are poised for real significant growth and it was identified as an important contributor to the Canadian economy. This didn’t come as a surprise to me — but it was a surprise to some outside our sector.

The Council’s report puts us in the spotlight; and for the first time in a long time provides positive recognition of the importance of the Canadian agricultural sector.

In the report, Canada’s strengths in agriculture are identified as being: trusted food safety, the availability of resources such as water and arable land, reliable production, and strong research clusters. Global opportunities were identified as being: the exploding market demand for higher value foods and the growing global supply constraints in land, water, energy, and carbon emissions.

In short — Canada has what much of the rest of the world is lacking.

The Council has proposed ambitious targets that would increase agri-food exports by US$30 billion over the next five to 10 years; and they have outlined specific actions that will allow the agricultural industry to capitalize on its strengths and opportunities and fulfill its growth potential. These actions include convening the private sector, collaboration between federal ministries and departments, working with the provinces, and using pilot projects. However, several obstacles need to be removed before meaningful progress can be made.

First among these obstacles is the need for harmonization of the regulations in place at the federal, provincial, and just as important, municipal levels of government. If government creates a consistent, predictable regulatory environment it will create confidence for investors.

Let me give you one example of how frustrating it can currently be for businesses to navigate different systems of government. When I moved to Guelph in ‘09, a company was trying to open a flour mill at the north end. After two to three years of working on getting the approvals needed and $50,000 spent on a report on why it would be beneficial to Ontario farmers — they gave up. Their investors, fed up with the lengthy delays, left. The same company had opened a flour mill outside Winnipeg and it only took them less than a year to get all of their requirements satisfied.

So it also wasn’t surprising to me that the Council noted our food processing sector is under developed — we only process about half of our own agricultural output. Support for the adoption of new innovations will encourage gains in productivity.

For the grain industry in particular to achieve its growth potential, we also need to remove trade obstacles that restrict our ability to increase our global market share. The Council recommends preferential trade agreements particularly in the expanding Asia-Pacific region. However, these agreements require lengthy negotiations and the political will to implement.

The federal government has mentioned agriculture in their budget in a significant way for the first time in years; this investment is needed if we are to reach the growth targets set out by the Council. Private industry and farm organizations also have a role to play. If successful, Canadian agricultural products would have an eight per cent share of the global market, yielding an additional U.S. $11 billion. Canada would also double its current share of global agri-food products, adding an additional U.S. $19 billion to our economy.

That’s real, profitable growth; but I will be surprised if we see it within the proposed timeframe — unless we all commit to work together to develop an obstacle-free business environment. •

About Barry Senft 61 Articles
CEO, Grain Farmers of Ontario