Brenda O’Farrell
The Advocate
A report released earlier this month that looked at the prospects for Canada’s agricultural sector outlined nine policy initiatives to increase Canada’s food production while reducing the industry’s carbon emissions.
The report, entitled A New Ag Deal: A 9-Point Plan For Climate-Smart Agriculture and produced by the Royal Bank of Canada, the BCG Centre for Canada’s Future and the Arrell Food Institute at the University of Guelph, described this challenge as “Canada’s moonshot,” which would put the country on a trajectory to being a world leader.
Here is an overview of the nine policy recommendations that focus on five area: soil, methane, fertilizers, talent and technology, and consumers.
Soil as an asset class
As thousands of farmers across the country saw the opportunity to increase their revenues by capturing carbon in their land, their enthusiasm about the prospects of the carbon market has waned. As the report states, pilot projects have been unsuccessful and guidelines to access are unclear.
1. Build Standards To Support Carbon Markets
The authors cite measures that say farmland in Canada can sequester between 35 to 38 mega-tonnes of carbon by 2050, an amount equivalent to about 40-45 per cent of the current emissions from of the oilsands. With a carbon market estimated to be valued at $4 billion by that time, farmers could see their slice of it ranging from tens of thousands of dollars for some operators to more than a $1 million for larger operations. But it all needs to be measured.
To do this, the authors suggest:
- Create A Climate-Smart Database To Help Farmers
An extensive data pool is the key to measuring the progress of climate practices, the authors state, adding that many soil maps have not been updated since the 1950s.
A government-funded database would provide real-time economic information for producers, experts and decision-makers.
- Develop A Fair System That Ensures Market Equity
The study stresses that although it is important to incentivize farmers’ future behaviour, farmers who have been the earlier adopters of climate-smart practices should also benefit and be rewarded. Failing to do so could bring unintended consequences.
The study suggests farmers who have been the first to implement regenerative practices that were perhaps not adequately measured could benefit from expanding capital gains exemptions for qualifying farmland. Methods exist to “back cast” to estimate past changes in soil-bound carbon over several years.
Methane as a growth opportunity
Agriculture is responsible for an estimated 31 per cent of the methane emission in Canada, with 86 per cent of that stemming from ruminant animals digestive process and the remaining 14 per cent from manure. But manure can also be a source of renewable natural gas, the report’s authors claim.
4. Promote Ways To Make Methane Cuts Profitable
Technology and tools to deal with methane exist, the report points out. The focus now needs to shift to how to make the process of mitigating its effects profitable. One way is to “incentivize utilities to purchase renewable natural gas from digesters” and support the construction of digesters.
Fertilizer supply chains as strategic drivers
5. Strengthen Canada’s Domestic Fertilizer Portfolio
Beyond focusing on revenues, farmers need to ensure the supply of fertilizers and agriculture solutions are affordable and accessible.
While Canada is the largest producer of potash, it is dependent on other countries for nitrogen and phosphorus.
Prior to the Russian invasion of Ukraine, Canadian farmers sourced 85 per cent of nitrogen fertilizer from Russia. Tariffs imposed following the outbreak of war has dramatically increased the price of that commodity.
Building in-Canada agricultural value chains by promoting the use of biological products can be one solution. By blending them with traditional fertilizers, they can help build healthier soils.
“Canada is in a unique position to lead in this space,” the report stated, “given the raw resources required to create these solutions are found in rural regions.”
Technology and Talent As Competitive Advantages
The labour shortage on farms extends further than merely needing workers during harvest periods. Farmers need access to experts and advisers. They need to collect data and integrate new technologies.
- Nurture an innovation-driven ag sector
The report’s authors call for support of tech-savvy Canadian agricultural companies. Research and development dollars for “a thriving carbon market and growth of big data analytics.” It is an area that Canada finds itself falling behind compared with other global peers.
The report claims in 2021, more than US$6.9 billion in venture capital funding went to American ag-tech companies, while only US$270 million found its way to Canadian ag-tech firms.
- Revive Canada’s knowledge-sharing network
A once active network of agriculture experts associated with universities across the country that in years past provided farmers with guidance and advice has frayed, in many instances, due to a rollback in funding. This same types of networks in the United States, according to the report, have been bolstered.
This is an area where provincial involvement would benefit, where experts can provide on-farm demonstrations to encourage the adoption of new management practices and innovations.
- Boost investment in post-secondary education
Research shows that Canada’s agricultural sector is on the threshold of its biggest labour and leadership shifts. “Current immigration policies that fast-track skilled farmers and on-farm labourers should continue to expand to meet this challenge,” the report states.
To meet this goal, agricultural colleges and universities should continue creating programs that welcome students from different educational backgrounds and faculties to create programs that increase students’ exposure to agriculture.
These institutions should create carbon management programs and invite students from different faculties “to understand how greenhouse gas emissions are tracked, ways to create corporate objectives to decrease emissions and effective methods to monitor progress.”
In addition, to bridge labour gaps, governments should eliminate barriers to foreign credentials for professionals like veterinarians.
Consumers As Drivers Of Market Change
- Influence purchasing patterns through procurement:
The federal government must lead by example. That means it should align its procurement policies with climate-smart farming practices to achieve its net zero emission commitments.
