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The future of Canada’s agriculture – planting optimism

Global trends portray an optimistic future.


February 16, 2008
By Jay Bradshaw*

Although the Canadian farming industry has experienced some difficult and challenging times during the past two decades, ranging from inclement weather, soft crop prices to increased competition from growers in South America and Eastern Europe, to the BSE and Avian Flu outbreaks – I would venture to say that this is one of the most exciting and promising times to be in agriculture in Canada.

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Commodity prices in corn and wheat in particular had an amazing rally in 2007 and are currently at peak levels. This bullish trend, which will likely continue over the coming years, thanks to various global macro-economic and environmental factors, is expected to bring crop prices to new levels never attained before. We are looking at a potential market shift that is even more profound than the ones that occurred during the 1970s and ‘80s.

Some of the factors that have been driving crop prices upwards are attributed to the ongoing increase in crop consumption that surpasses production volumes (demand-supply) and have depleted global carryover stocks and inventory; the changing diets of the continuously growing middle class in China and India; and the rise in crude oil prices coupled with a strong environmental agenda that pushes for alternative energy resources such as corn produced ethanol.

The emergence of the bio-economy
The surge in crude oil prices in recent years along with consumer pressure and governments’ understanding of the need to reduce greenhouse gas emissions have been driving the quest for renewable and environmentally friendly energy resources as an alternative to fossil fuels.

As a result, ethanol production from corn continues to rise not only south of the border but in Canada as well. It is expected that in the very near future, ethanol produced from corn in eastern Canada will reach 1.3 billion litres, sufficient to cover about two percent of the overall Canadian fuel for transport requirements. Indeed, the debate about the feasibility of ethanol as a renewable energy resource is still on, but I strongly believe we have passed the point of no return on this front. Ethanol production from agricultural commodities as a major energy resource is here to stay.

The continuous investments in research and development, and technological advances such as corn amylase technology which enables the use of a special enzyme already contained in the corn grain to improve the ethanol production process, are only some examples of the forces that will continue to drive this industry further.

Another evolving sector that has the potential to positively impact the Canadian agricultural industry has stemmed from the global trend of reducing dependency on petroleum. The emergence of bio-degradable products usually produced from petroleum, such as machinery lubricants, synthetic rubber, paints and various plastic products from bags and cups to auto parts, can now be made of canola, corn and soybean oils, leaving limited environmental footprints, if any.

Holistic and synergetic
To ensure the sustainability of the Canadian agricultural industry as a whole, all of us will have to re-think the way we operate. Taking a holistic approach that looks at the entire production and growing cycle of crops will ensure the sustainability of growers’ businesses – financially, operationally and environmentally – for the short and long-terms.

At Syngenta, we are looking at new ways we can support growers in this ‘total approach’ model, providing sound agronomic counsel coupled with best practices in seeds, seed care and crop protection, all the while ensuring good land stewardship as well as environmental and social responsibility.

From an industry-wide perspective, to capitalize on these market shifts and global trends, the Canadian agricultural industry has to work in synergy through co-operation with all stakeholders in the value chain. To be successful, not only in capturing new opportunities but to maintain a competitive edge on a global basis, strategic alliances will be formed.

Coupled with these new and unique initiatives, we continue developing strong partnerships with our customers. One example, Leadership At Its Best (LAIB), is a partnership that targets grower associations across Canada. Aimed at providing these influential groups with a variety of leadership and business development tools to enhance their skills, LAIB encourages strong and effective grower associations that demonstrate agricultural leadership in Canada.

As the global agricultural sector continues to expand its role as a major resource for other industries – such as energy, cosmetics, pharmaceutical, automotive and others – the Canadian agricultural industry is on the verge of a turning point with great opportunities and challenges lying ahead. New approaches to farming and the establishment of partnerships with traditional and new players within and outside the industry will become major keys for success. -end-

*Jay Bradshaw is president of Syngenta Crop Protection Canada, Incorporated.