MLI Paper – Prosperity in Canadian Agriculture: An Opportunity for More Jobs and Investment
October 17, 2011, Ottawa, ON – More food will be eaten over the next half century than has been eaten by human beings since the dawn of history. The combination of increasing population and rising incomes, decreasing poverty, and increased non-food use for many food staples (e.g. bio-fuels) has resulted in an explosion of food demand. In Canadian Agriculture and Food: A Growing Hunger for Change released today by the Macdonald-Laurier Institute, authors Larry Martin and Kate Stiefelmeyer argue that Canada should be poised to capitalize on this opportunity.
Martin and Stiefelmeyer argue, “We are uniquely positioned to benefit from the increasing demand for food due to our vast tracts of arable land, abundant water, infrastructure, and long experience in agriculture.”
However, Canadian agriculture and agri-food sector is not keeping pace. In many commodity categories, and in most processed products, Canada is losing international market share. Compared to other countries, productivity in this sector appears to be falling behind and our influence in world trade talks about agriculture is falling as well. This is a missed opportunity for Canada. But it is also far more: at a moment when it is not clear that the world can meet the growing demand for food, it is a potential humanitarian tragedy for the globe. Canada faces both an economic and a moral imperative to do better.
The authors argue that the solution is largely in the hands of Canadians and their governments. They outline several factors that contribute to Canada’s poor performance:
- The Regulatory System. Canada’s regulatory system discourages investment in Canada while encouraging it abroad.
- Agricultural Policy. Canada’s agricultural policies continue to focus on income support rather than facilitating productivity and investment.
- Preoccupation with Small Operations. A preoccupation with subsidizing small operations reduces our competitive advantage and directly and indirectly reduces the amount of capital available for investment.
- International Trade Policy. Canada suffers from serious tariff and non-tariff barriers in accessing markets that demand Canadian products.
They conclude that, “Policymakers in particular must face up to the fact that this country’s laws and regulations are sadly out of date, reflecting a mistaken belief that agriculture and food processing are industries of the past, not the future. Canada’s potential as a food superpower can be unleashed by removing the barriers erected by poor policy.”
Larry Martin is a Senior Research Fellow at the George Morris Centre in Guelph, Ontario. He is also a Research Advisory Board Member for the Macdonald-Laurier Institute.
Kate Stiefelmeyer is a Research Associate at the George Morris Centre in Guelph, Ontario.
Canadian Agriculture and Food: A Growing Hunger for Change is the latest paper in MLI’s Hungry for Change Series.
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