The agriculture sector is preparing for Ottawa’s next policy framework with its increased focus on sustainability. More technological change is also filtering into the industry, but its implementation faces significant logistical and even cultural obstacles, and it relies heavily on government funding.
A top priority of agri-businesses is to take care of the environment, Taylor Brown, senior policy analyst, agri-business and national affairs, with the Canadian Federation of Independent Business (CFIB), told The Epoch Times.
“They’re stewards of the land. … They really care for their environment and protection.”
But now, over half of the firms surveyed by CFIB say their higher priority is to keep up with costs.
Rebecca Lee, executive director, Fruit & Vegetable Growers of Canada, told The Epoch Times that she is urging Ottawa to look at agricultural policy through the lens of food production, but added that farmers no longer represent a meaningful portion of the population and so don’t have the votes to effect policy changes.
“Any professional grower right now will tell you two things: having enough crop protection products in their toolbox and having the labour to produce. Those are the two top issues,” Lee said.
Her concerns are how Ottawa’s environmental objectives impact farming and how Canada will be able to balance food security with additional requirements on farmers.
Farmers eventually won’t grow those crops that they have to subsidize if retailers aren’t able to cover their production costs, Lee added.
Sustainability Priority
Ottawa is elevating sustainability as a key focus of agriculture. A considerable portion of its technology-related spending in 2022 went toward reducing emissions and sustainable agriculture.
The current Canadian Agricultural Partnership (CAP)—a $3 billion, five-year investment by federal and provincial governments that engages private sector venture capitalists—will be replaced by a new $3.5 billion Sustainable Canadian Agricultural Partnership (SCAP) starting April 1 and running for another five years.
Ottawa says agriculture represents about 10 percent of Canada’s greenhouse gas emissions, and Budget 2022 aims to triple the size of the Agricultural Clean Technology Program.
In addition, on Dec. 12, 2022, Ottawa launched consultations on a Sustainable Agriculture Strategy “to improve the sector’s environmental performance through a coordinated vision.”
Canadian Federation of Agriculture president Mary Robinson told RealAg Radio in an interview at the time that consulting with the feds is a great opportunity and she’s hopeful that “government will deliver something that makes sense for us.”
But in working with government on new initiatives, she is concerned about redundancy and already-stretched resources across the industry.
“I do have concerns about the balance between how government consults with industry and how industry has to shoulder the burden of that financially and from a resource perspective,” Robinson said.
In its submission to the feds regarding the SCAP, CFIB’s primary focus is reducing the total tax burden and red tape on businesses.
The CFIB highlighted efforts the agriculture sector has already shown in carbon sequestration, such as via minimum tillage, and the work that their farm members are already doing to protect the environment.
“There’s no avoiding new environmental initiatives. This government is clear that this is their priority. They’re not backing down from anything. We’re just trying to work with them to minimize the negative impacts on our farmers,” Brown said.
Lee says that given the minimal margins for fruit and vegetable growers, farmers will have to pick and choose how much they spend on contributing to research under SCAP, which is expected to be more than under the CAP program.
“If farmers are putting out money for this kind of research, they’re not putting money into investing in their own companies.”
Agtech Impact
Agricultural technology, or “agtech,” involves applying advances in livestock and crop management, soil improvement, equipment upgrades, sensors, sustainability, food safety, and data gathering through a variety of technologies.
Adoption of new technology shows promise for improving efficiency and is also a significant means for the government in pushing for its climate objectives.
Accounting firm KPMG said in a 2021 report that at least 166 start-ups were focusing on agtech in Canada in part aided by the government’s CAP program.
“The public sector continues to be the largest source of funding for Canada’s agriculture R&D,” according to KPMG.
Brown said 86 percent of agri-businesses surveyed by the CFIB agree that government should provide support to businesses that need help adapting to environmental policy changes, through rebates, grants, etc.
Lee says the biggest limitation to greater adoption of agtech is lack of rural broadband internet—without it, it doesn’t matter how much tech you have.
“There’s a lot of catching up that has to be done and investment on the part of government here to make sure that that infrastructure is available,” she said, adding that the interest from farmers is there, since they want to be more efficient.
A November report by RBC put forth a strategy for Canada to become a leader in the technologies to power the green revolution in agriculture. The bank said “significant potential remains untapped” regarding grabbing a bigger share of the global market share of agricultural exports, but it also found that farmers have a number of concerns with adopting new technologies.
RBC said many Canadian farms are small and operate on thin margins, which makes absorbing the cost of things like soil testing and precision agriculture technology difficult.
Research has shown that many producers are reluctant to adopt practices that introduce uncertainty into their operations, according to RBC.
“These are family farms,” Don Smith, VP of petroleum and innovation at United Farmers of Alberta, is cited in the RBC report. “They’re not going to experiment with new technologies if there’s a risk it could negatively impact their ability to feed their family.”
A November 2021 study by the Information and Communications Technology Council (ICTC) said that “Canada will need to prioritize agri-food innovation and digitization” but also that older technologies saw higher rates of adoption than newer ones.
ICTC’s survey found six key barriers preventing agtech adoption: the cost of equipment and implementation, access to high-speed internet, low return on investment, labour shortages, technical challenges, and the “oversupply of technologies that is not very useful to farmers.”
KPMG noted that “Many Canadian farmers still rely on their own experience and experimentation rather than third-party advice to implement a new technology or process.”
Hottest Agtech Trend
Regenerative agriculture may be the hottest thing in agtech to help sustainability. The practice aims to restore soil health and prevent erosion by planting trees among crops, minimizing plowing, avoiding synthetic fertilizers and pesticides, and using rotational grazing techniques. A decent amount of carbon is even sequestered along the way.
RBC states that many Canadian farmers are already employing regenerative agriculture, and that in Saskatchewan, 80 percent of farmers are using no-till or conservation tillage practices.
As for greater adoption of regenerative agriculture tech, the RBC report says that the benefits of some of its practices generally only begin to outstrip the costs four years later, with profitability appearing only in year six.
“Markets to compensate farmers for storing carbon in soil—as well as the methods to measure it—are still in experimental stages and generally lack a sufficient payout to make up for the upfront investment,” stated the report.
There is also a credibility aspect for regenerative agriculture.
“Regenerative agriculture lacks a single legal or regulatory definition and there is no oversight for how it’s used. This leaves it open to misuse and bold claims about its power to store carbon, when much of that is still open to scientific debate. With no single test or certification for claims, farmers (and consumers) are left to sort out credibility on their own,” according to RBC.
Thus regenerative agriculture faces a number of challenges, but according to CB Insights’ “11 Tech Trends To Watch Closely in 2023,” “a host of agtech companies are aiming to make regenerative agriculture easier to pull off.”
An added pressure for producers, according to CB Insights, is consumers putting more emphasis on the sustainability of what they buy and thus retailers will be touting initiatives like regenerative agriculture “to establish credibility and make customers feel better about buying their wares.”
Food price inflation outpaced overall inflation over the past 12 months. In November, the prices of food bought from stores rose 11.4 percent year-over-year, after an 11.0 percent gain in October.
