Want productivity growth in Canada? Invest in agtech

Opinion

We’ve entered a disorienting new era — one where global trade and market access are being decided by the politics of disruption and intimidation more so than fundamentals of supply and demand. The result is rising uncertainty. To offset this, policymakers, private sector leaders and investors across our country must collaborate to spur innovation within key industries to shore up strategic sectors of our economy and attract new trading partners.

In doing so, we cannot afford to overlook the importance of agriculture. Indeed, it’s one of the few sectors where concerted action could lead to big productivity gains in relatively short order.

Farm Credit Canada (FCC) estimates Canada’s agriculture sector could generate an additional $30 billion in net revenue over the next decade if it simply achieved the same productivity growth levels it did in the 2000s. And that doesn’t account for the added local spin-off benefits that would come from all that extra cash flowing through the economy.

It’s the kind of opportunity Canada must capitalize on to navigate the ominous convergence of more extreme weather, trade wars, and global price distortions stemming from armed conflicts in Ukraine and elsewhere.

At the heart of these efforts should be the embrace of digital agriculture technologies — otherwise known as agtech. This collection of established and emerging farm tools aims to provide producers with cost-effective, sustainable ways to increase productivity on their farms.

Automated seeding machines precisely sow seeds at just the right depth and spacing to maximize yield. Drones equipped with prescription maps powered by artificial intelligence identify where herbicide resistant weeds will grow to inform decisions on crop inputs. Weather and soil sensors allow growers to remotely monitor crops, sending notifications straight to their phones when moisture levels change and a field needs attention. In dairy and livestock operations, visual recognition programs can detect early signs of herd illness.

And when it comes to agtech innovation, the Prairies hold immense potential.

Manitoba especially could become a key player within what’s being called Farming 4.0 — agriculture in a fourth industrial revolution, characterized by AI, big data, robotics and the Internet of Things. The province is a global transportation hub, and has abundant agricultural land and water resources, industry-leading advanced manufacturing companies, world-class research centres, top-ranking post-secondary institutions, innovative startups, and a tight-knit tech community.

Meanwhile, 20 minutes outside of Winnipeg sits EMILI’s Innovation Farms — a smart farm where cutting-edge agtech tools are tested, validated and demonstrated every day in a live commercial setting.

If a critical mass of policymakers supported, investors prioritized, and producers embraced agtech, it could transform Canada’s agricultural sector from an important — but often underappreciated — part of the economy to a true strategic asset within a rapidly evolving and digitalizing global economy.

That’s what Australia is attempting to do. The country has a population, GDP and land mass all smaller than Canada’s. Yet it possesses tremendous will. In 2022 the Australian government released an ambitious digital agriculture strategy that aims to make its agriculture a $90-billion sector annually by the end of the decade by leveraging emerging technologies to turbo-charge productivity. That’s a roughly fivefold increase.

For comparison, if Canada were to grow our agriculture industry at the same rate, it would be worth three-quarters of a trillion dollars by 2030.

But while increasing productivity — measured by the Bank of Canada as the amount of goods or services produced in a set amount of time — is top of mind for producers, it can sometimes feel like a buzzword to the rest of us. We hear constant reports of Canada’s lagging productivity but what does it mean? And why does it matter?

Put simply: higher productivity levels and growth enables businesses and industries to do more with less. It leads to higher wages and increased growth in job opportunities, as companies see greater return on their investment with each new hire.

It is a catalyst for creating greater domestic wealth, and therefore more government tax revenue. Together, these are needed to create a buffer against the external shockwaves Canada must adapt to given the mounting turmoil within the still interconnected global economy.

Canada’s agriculture and agri-food sectors combined already provide one in nine Canadian jobs, employing some 2.3 million people, while generating nearly seven percent of national GDP, around $150 billion annually. This includes jobs that take place on and off the farm.

But this could be so much more — if only together we make agtech a national priority.

Jacqueline Keena is managing director at EMILI, and a professional agrologist with degrees in agribusiness and public policy.