Traceability systems could be the catalyst to get Canadian agriculture participants taking a systems approach that could improve quality, efficiency, competitiveness and profits, David McInnes, president and chief executive officer of the Canadian Agri-Food Policy Institute says.
McInnes reviewed a report the institute released in February that calls for radical reforms of Canadian agriculture policies and performance.
The report details how Canada has lost market share for exports, has lost domestic market share to imports and is losing food-processing companies.
Billions have been spent on “risk management” programs without reducing risks, he said. The only thing those government subsidies have accomplished is reducing the risks to farmers’ net incomes, he said.
But that ignores the reality that risks to net income come from many sources and directions, he said, such as closure of a plant that has been buying from farmers, or an outbreak of a foreign animal disease.
It would be better to take a systems approach to risk management, McInnes said, incorporating all of the risks and supply-chain partners involved in the system.
In similar fashion, a systems approach should be adopted to aim for specific targets, he said. The institute suggested three – doubling exports to $75 billion, increasing consumption of Canadian-produced foods to 75 per cent and getting 75 per cent of Canada’s agri-food sector using biotech solutions, all by 2025.
He said Canadians have been operating “in silos” both in the way they think and are organized. That leads them to conclude that changes will happen either when governments legislate change or supermarket chains demand it.
“It’s a command-and-control approach to making things happen,” he said. “This is the mindset we’re in.”
He said in a private conversation later that the institute spent a lot of time and effort talking to people in the industry, trying to come up with a cogent analysis and recommendations “and we came to the systems approach rather late in the game.”
Now the institute intends to flesh out that approach in upcoming reports, he said.
The consumer/customer/client/ taxpayer/citizen is placed in the centre with this approach, and the partners in supply chains are arranged in a circle around that centre.
McInnes said the point of the illustration is that “the relationships have to change.”
As an example of what’s coming, he said “soon people will shop by carbon footprint and label.”
The Manitoba potato industry that has found it can market culls for polymer production will be well positioned for this development, he said. Biotechnology will become an important component in addressing the carbon footprint challenges and opportunities, he said.
Another example is the system that involved nutritionists, educators and a cheese company in the development of mozzarella “wiggles” that appeal to children and supply good nutrition for the school lunch program, he said.
He said one of the changes required is a shift from five-year plans to 10 and 15 years, and said that applies to not only governments, but also food companies. “We need to identify destinations, where we want to be in 15 years,” and then take a systems approach to getting there.
He said everyone agrees that there needs to be profit, food safety and nutrition, but destination goals are more specific with deadlines. For example, Toronto aims to have its public institutions, such as nursing homes, buying half of their food from Ontario sources.
Another example he outlined involved Wal-Mart setting an environmental-footprint standard for its dairy suppliers. Rather than leaving it to individual companies to compete, dairy farmers decided to take this on as an industry-wide challenge and ended up not only retaining Wal-Mart as a customer, but also delighting other customers and the general public.