With its competition in global markets gaining ground quickly, Canadian agriculture must work fast to stay ahead in the game
Canada needs “a more business-friendly” regulatory environment that spurs innovative research and rewards commercialization, a federal representative told canola industry delegates earlier this month.
“That doesn’t mean getting rid of regulations because as soon as you do that markets all over the world are going to close,” said Greg Meredith, assistant deputy minister for strategic policy with Agriculture and Agri-Food Canada while taking questions after his address to about 300 delegates at the CCC convention.
“You’ve got to have strong regulations. But they have to be transparent and they have to be fast,” he said.
“The regulatory climate has simply got to be more business friendly.”
A big challenge facing government right now is its capacity to simply keep up with the pace of technological development, he said.
“For countries where the regulatory environment is fast and efficient and transparent that’s where the research and development is going to take place and that’s where the commercialization of these new inputs is going to take place.
“We’re going to lose out if we don’t have that part of the equation right.”
Meredith also said he believes Canada can vastly improve its intellectual property protection. “It has to be transparent how value extraction is going to take place,” he said.
“The producer has to benefit, companies have to benefit. This is an industry that knows that very well. There’s got to be synergy throughout the supply chain.“
Government’s role is ensuring there’s a policy, regulatory and legal environment in place that leads to that, he said.
Meredith said the successful partnership between government and the industry’s life-science cluster will continue and the industry can expect ongoing funding for it.
“It takes a lot of input to develop new crops and new genetics these days, it’s certainly cross disciplinary,” he said. “We’re going to continue that, both from a funding point of view and from the point of view of providing specialized resources to the cluster.
Meredith also spoke to what he sees as the significant challenges facing the canola sector. The industry “can’t rest on its laurels” and needs to stay vigilant for those “sideswipes that come out of nowhere,” he said.
There are certainly tremendous growth opportunities in the countries the industry is targeting for market expansion, such as Brazil, Russia, India and China, he said.
But these are also going to prove to be tough markets “fraught with risks and challenges” to serve.
Punishing tariffs and restrictive port access notwithstanding, just physically moving product into the marketplace is going to present its own set of challenges, the deputy minister said.
“India’s consumption of edible oils looks like an enormous opportunity, because at a billion people, they’re going to surpass China soon, in terms of its middle class,” he said.
But this is also a country lacking retail infrastructure, and it cannot be presumed that the predominant open or ‘wet’ markets will be changed easily or quickly there, he said.
“In order to get our product to those consumers there will have to be an enormous development of infrastructure in these countries,” he said.
Another reality is that Canada will be competing for this market access alongside other emerging world commodity producers.
The government is keeping an eye on expanding productivity elsewhere in the world, Meredith said, noting that on other commodities such as wheat, countries such as Kazakhstan, Ukraine and Russia are expected to double production by 2021.
They presently lack the technology of North American farmers but perhaps not for long, he said.
“The issue there is they have the same kind of soil as us. They don’t have the same kind of institutional infrastructure and don’t have the agronomic tools that we have, but they’re gaining on us,” he said. “As a country, we don’t have a sense of urgency about how quickly they could be gaining.”
Moreover, some of the same countries Canada sees as potential markets are also investing very heavily in competing biotechnologies and other technologies for agronomic improvements, he said.
China, India and Brazil already exceed the rest of the middle-income world in those types of investments, he said. “These countries are investing very, very heavily in competing technologies.”
Meredith later told reporters the challenge for Canada is not so much that investment in research and development is flattening out, but that competitors around the world “are being very aggressive.”
“We have got to look out and say who are we going to be competing with in the world?” he said, adding that he wants to see the maximum possible return on current partnerships between universities, governments and the private sector.