Agriculture policy overhaul needed: report

COVID-19 has exposed significant challenges, needed changes

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Glacier FarmMedia – Drastic changes to markets, labour conditions and public perceptions are driving a need for new agri-food policies, according to a report from industry experts.

Agri-Food Economic Systems’ latest policy note identified 10 pressures on the industry, each one varying in “magnitude, significance, urgency and permanence.”

The report cited massive losses in food service markets caused by the COVID-19 pandemic and uncertainty over the market’s ability to recover as one pressure on agri-food in Canada. The threat that meat processing facilities could suddenly close was also identified.

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Why it matters: Established agriculture policy around the world is being upended.

Labour is on the radar

The authors also highlighted labour as a major concern.

Each year, horticulture operations run into problems accessing foreign workers, but the issue this year received more attention as a result of the pandemic.

Foreign worker illnesses and deaths related to COVID-19 drew negative attention to the practice of importing labour, threatening its long-term existence.

“At the same time, the Canadian workforce is not well aligned with repeated laborious work — including farm work and food processing. This could prove to be among the principal strategic issues exposed by COVID-19 pandemic, and it is global in scope,” said the report.

New realities for farm support programs

Inequities in perceived public support for different commodities, which saw commodity groups fighting over a limited amount of government support created another challenge, said the report.

It noted that business risk management (BRM) programs in Canada are based on long-held experiences of rules-based trade and a stable agri-food policy environment, governed by five-year funding arrangements between the provinces and the federal government; but “this experience may not be indicative of what is to come.”

The policy report questioned if current discussions around BRM programming to tweak existing programs are necessary.

“Industry desires for program design changes are predicated on past market volatility and needs for stabilization,” it said. The report added that industry and government may be challenged to think about a more unstable farm operating income outlook and related BRM programming.

Huge subsidies elsewhere a challenge for Canada

At the same time, most field crop outlooks have a bearish price outlook, “emboldened by historic agricultural support levels in the (United States) and the prospect of bumper crops in key growing areas and burdensome stocks going into the fall harvest.”

Authors of the report highlighted Canada’s unemployment rate and slumping incomes, which may impact food demand. On the other hand, it said government aid packages designed to combat the impact of the pandemic could be inflationary.

Shrinking public budgets and a bad economy may also increase the sense of provincialism, in which Canadians compete against one another to grow or retain agri-food industries, rather than co-operating.

Canadian food processing needs investment

“These strains could occur precisely as agri-food must take a more refined and strategic view of investment in food processing — as market access for farm products becomes increasingly uncertain and volatile,” said the report.

In essence, the report suggested that provinces try harder to work together to meet these new challenges.

“As rules-based trade in agri-food retreats — most notably with dramatic increases in (U.S.) farm support — the solid footing for today’s federal-provincial-territorial agreements in agriculture is weakened,” Douglas Hedley, Agri-Food Economic Systems associate and co-author of the policy note said.

“A descent into provincialism in agri-food policy in Canada would be disastrous, but it cannot be ruled out without awareness and effort.”

Rules-based trade eroding

These domestic challenges come at a time of turbulent world politics, highlighted by the “increased erosion in the integrity of rules-based trade”.

Uncertainty over food security during the pandemic prompted some nations to restrict exports, and increased tensions between the U.S. and China. That, in turn, relegated other major agri-food suppliers like Canada to a “second tier” internationally, the report noted.

The policy note said Canada must identify and develop bilateral and multilateral trade relationships to “effectively use our agri-food capacity, while playing an active role in revitalizing or at least halting the decline in the rules-based system.

“All of these events in domestic and international markets have dramatically increased the volatility in agricultural prices and trade flows,” said the report. Markets are not only responding to volatile frictional global supply and demand pressures, but also to the increasingly political and unpredictable nature of trade and foreign affairs actions.

“Our great difficulty is to fully come to grips with the situation that lies ahead of us,” report co-author Al Mussell, Agri-Food Economic Systems research lead said.

About the author

Reporter

D.C. Fraser

D.C. Fraser is Glacier FarmMedia’s Ottawa-based reporter. Growing up mostly in Alberta, Fraser also lived in Saskatchewan for ten years where he covered politics, including a stint teaching at the University of Regina’s School of Journalism. He is an avid fan of the outdoors and a pretty good beer league hockey player. His passion for agriculture and agri-food policy comes naturally: Six consecutive generations of his family have worked in the industry.

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