The statistic does give you a bit of a jolt: In 2015 tiny Netherlands was No. 3 in world agri-food exports, with Canada way behind in No. 12 spot.
That statistic is highlighted in the second report by the Advisory Council on Economic Growth, which was established by Minister of Finance Bill Morneau and led by respected economic adviser Dominic Barton.
The report has received a lot of national attention, and contains what appear to be well-considered recommendations on how governments and the private sector can manage this country’s future economic challenges.
What does it say about agriculture? In the text of the section titled “Unleashing the growth potential of key sectors,” the word “agfood” appears 95 times, “agriculture” 15 times and “farmers” three. In other words, it says a lot about food but not much about farming.
The report makes several recommendations for increasing Canada’s export food market share, including establishing an Agfood Growth Council of “visionary, high-profile and respected leaders from the private sector.” Similar recommendations were made in a report released in April by the Canadian Agri-Food Policy Institute and the Public Policy Forum.
This may be worthwhile, but it’s a signal to farmers to start lobbying for the council to include them, and at least one member needs to be a “devil’s advocate.” In light of some recent corporate expansion disasters, companies are adopting the management practice of appointing someone whose role is to raise tough questions to avoid “confirmation bias,” which is when everyone gets so upbeat about expansion that no one dares to suggest that there might be problems. Anyone remember Saskatchewan Wheat Pool?
Any council on the directions for “agfood” should include members who do, and who remember that we’ve been around this block before. In 1989, Agriculture Minister Don Mazankowski commissioned a “Growing together” initiative in which the industry was supposed to pull itself out of a slump by getting farmers more involved in “value added.”
Ironically, at that time Prairie farmers did own a good chunk of the grain and oilseed processing and fertilizer industries through the Prairie Pools. The failed drive to expansion into value-added investments forced them to sell them to raise cash in a failed attempt to save the companies. The failed value-added craze led to Prairie farmers losing their ownership of the handling system as well as the processing system, and many lost a lot of equity that would have supported them in retirement.
A devil’s advocate is also needed to counter the notion that ending supply management would lead to an export-driven boom of dairy industry prosperity. Just as ending the wheat board didn’t lead to pasta plants and flour mills springing up on the Prairies, ending supply management isn’t going to make Canadian farmers competitive with New Zealand farmers raising cattle outside on grass 365 days a year. And by the way, much of the (currently glutted) export dairy market is for manufacturing infant formula for China, where mothers have apparently been convinced that formula is better than breast milk. Do we really want to be in that market?
And in a worrisome parallel with the Prairie Pools, dairy farmers currently own a good chunk of their processing industry through co-operatives. Let’s hope their boards and senior management are familiar with the term “confirmation bias.”
This is not to say that there is no merit in the recommendations of the recent reports. By all means, industry representatives should get together to discuss ways of improving the Canadian economy through adding more value to farm products.
But that takes us back to that example of how Netherlands is doing so well. The Economic Council report tells us that it exports $7.2 billion in agricultural products, but in 2014 that included, for example, $1.5 billion in soymeal and $102 million in durum. Since the Netherlands produces neither, this seems odd until you realize that its export statistics include products that are imported into Rotterdam and then re-exported to other countries in Europe. That’s part of the reason for such a big export value.
But it’s not the whole reason; the Dutch have indeed done a fantastic job of making money by processing stuff that they don’t grow themselves. We could do the same in Canada — we’re right next door to the U.S., which would be more than happy to sell us cheap subsidized raw material for our processing plants, rather than us producing it here and having to support farmers with business risk management programs.
An Agfood council may be worthwhile, but it needs members who can ask tough questions, especially this one: “But what does it mean for the farmers?”
John Morriss is a former editor of the Manitoba Co-operator.