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With natural capital and trust, Canada can become an agrifood powerhouse

September 21, 2016
By: 
David McInnes
President and Chief Executive Officer
The Canadian Agri-Food Policy Institute (CAPI)

What would you guess is the single most important ingredient in modern food production? Good seeds? Rainfall? Fertilizer? The surprising answer is that around the world, the scarcest and most precious resource for producing food is trust. Luckily, Canada has natural advantages that could allow the people of the world to view us as their most trusted food source – if we make smart decisions.

To this point, much of the conversation about global food production has revolved around quantity: How will we produce enough for billions more people? But this is not the toughest challenge.

The bigger question isn’t whether we can produce enough food but whether we can do so sustainably, without bankrupting the planet. We need to pay more attention to natural capital: our water, soil and the biodiversity of living organisms.

Around the world, trust in food production is taking a beating as the depletion of natural capital continues. In many areas, water use – especially agricultural water use – is exceeding natural recharge rates. Algae blooms, fostered by the overuse of fertilizer and the runoff of phosphorus from towns and cities, are threatening oceans and lakes. In Europe and elsewhere, pesticide levels in groundwater are a concern. In China, people have come to distrust local food production so much that there is a booming trade in online imported food. People are also becoming concerned about the links between health and food production.

Although most are not aware of the science behind these issues, consumers everywhere are growing increasingly uneasy about how the food they eat is produced. This concern peeks through in popular movements about GMO foods, organic produce, “buy local” and so forth. But these are only stalking horses for the more serious problems.

Winning trust goes well beyond trying to reassure consumers about how we grow food. Agriculture needs to show how it lives within the world’s limited natural capital and actually enhance it. For instance, the global agriculture sector can shift from just improving its own carbon emissions to soaking up a substantial portion of emissions from fossil fuel greenhouse gases (GHG). Evidence suggests that as the price of carbon rises, properly managed soils might make this eventually possible. Canada needs to be bold in advancing such innovative thinking.

Many countries are going to struggle with rising costs of food production as their environmental burdens increase. Countries that seriously deplete their aquifers are facing water deficits. Others have cleared vast tracts of tropical forests – the great carbon sinks – for agricultural use. They have been facing consumer boycotts and sanctions as they become substantial GHG emitters and destroyers of ecosystems.

Supply chains are responding. For example, Canada is taking a leading role in sustainable beef production. Our retailers are part of a global effort to source seafood sustainably. Many producers here and abroad are managing pesticides and fertilizer use better. Many food companies are improving energy and water use.

Our strategic opportunity is recognizing that many countries will find it challenging to preserve, let alone enhance, natural capital. Canada, on the other hand, possesses an abundance of renewable freshwater and arable land relative to its population. Even our dreaded winters provide an agricultural advantage, acting as a natural pesticide.

Canada can define a powerful food brand as more and more consumers seek out trusted and more responsible suppliers. This is what we call Canada’s “big possibility.” Canada can position itself as a preferred food source and derive economic benefits from doing so.

But are we doing enough to truly leverage Canada’s potential? We lack a common goal. We can aim to produce more food, to do so sustainably and to improve its nutritional quality – all at the same time. This would place Canada even further at the leading edge of global food innovation. This effort will require strong collaboration across the food system, including agricultural suppliers, food producers, processors and retailers. It also extends to scientists, technology providers, financial institutions, the health community and others.

There would obviously be an important role for government. Federal, provincial and territorial agriculture ministers are discussing the issue of trust from the standpoint of maintaining the agrifood sector’s social licence to operate. Tackling the big issues confronting the sector (such as climate change) also requires a more co-ordinated Canadian science agenda. Carbon pricing will change behaviour, drive innovation and allow markets to properly allocate resources. National data and measures can track our progress. These steps will help deepen trust.

But we must be smart about how we impose new regulations. We want to lead without giving our competitors a significant cost advantage. With its natural capital assets, Canada has a chance to improve its competitiveness if it can encourage consumers here and abroad to increasingly value natural capital and better reflect food’s real ecological cost.

The expectations of consumers, our customers and even investors are constantly raising the bar. We need to inspire a transformation in the way we look at food and the natural capital behind it. By coming together as a nation, we can build Canadian agriculture and food into an even greater economic powerhouse.