Changing needs in the domestic market won’t be enough, however, to meet premier’s agri-business challenge says economist
by SUSAN MANN
New Canadians present a growing market opportunity for agri-business, provided businesses can adapt to changes in food preferences and can quickly roll out their products, says Farm Credit Canada’s chief economist.
But a Western University economist says he doubts shifts in the domestic market present enough of a growth opportunity for companies to meet Ontario Premier and Agriculture Minister Kathleen Wynne’s challenge of doubling the province’s agri-food sector growth by 2020.
“When you’re talking about adding billions of dollars of extra food processing and sales of primary agricultural products, you’re not going to do that in Canada,” says David Sparling, chair of agri-food innovation and regulation at the university’s Ivey School of Business. “Our market isn’t big enough.”
The industry therefore must also focus on increasing exports and adding more value to products, such as establishing local food systems, or manufacturing more value added products, he says.
Jean-Phillippe Gervais, chief agricultural economist with Farm Credit Canada, highlighted the market opportunity presented by new Canadians on Tuesday in a company news release. The release notes that by 2020, “immigration will account for 2.2 million new Canadians and two-thirds of Canada’s population growth.” FCC predicts that the growth could mean an additional $27 billion in Canadian food spending over the next seven years.
In 2011, the largest share of Canada’s immigration population — 45 per cent — came from Asia; Statistics Canada has estimated 55 per cent of new Canadians will come from Asia by 2031, the news release says.
Last year Ontario imported $19.8 billion worth of agri-food products, and Wynne noted meeting consumers’ changing tastes presents one way agri-business can meet the challenge she issued Monday at the Premier’s Summit on Agri-Food Innovation at Queen’s Park.
Supplying niche markets, such as organic, health and artisan foods, specialty goods, and biochemical or composite materials as well as competing more aggressively to capture a growing share of existing and emerging international markets presented other opportunities, she says.
Wynne’s challenge has garnered both support and criticism.
The Canadian Federation of Independent Business was encouraged the premier is focusing on the potential of the province’s agricultural sector says Mandy D’Autremont, the organization’s policy analyst. But for the sector to grow, “it will be important for the government of Ontario to provide the environment that will address the sector’s competitive challenges,” such as government red tape, he notes.
Ontario Progressive Conservative agriculture critic Ernie Hardeman predictably found fault with the challenge, noting it lacked details of how Wynne expects the industry to achieve the goal.