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This report is the third in a series addressing the top sustainability issues in Canadian business.

Report on Business & the Environment: Agriculture 2012

Growing from strength Farmers enhancing productivity with sustainable innovation

w e lco m e f r o m R B C

Seeding the future growth of our agricultural sector At RBC Royal Bank®, we know that farming is not only a way of life, but also an essential contributor to Canada’s high standard of living — playing a vital role in strengthening our economy. In fact, producers like you contribute to a Canadian agri-food sector worth $130 billion annually¹, employing over two million people and generating approximately 8% of GDP². We salute your resiliency in the face of present day challenges: volatile commodity markets, a strong Canadian dollar, increasing international competition, demanding consumers and changing weather patterns. Running a successful farm business today requires more specialized knowledge about everything from agronomy to climate change to global markets — not to mention all the latest technology. Your track record of concern for the environment is well documented. Over two decades ago, the agriculture sector was proactive in developing the industry-leading Environmental Farm Plan (EFP). This approach to identifying impacts on the environment and implementing stewardship practices that manage resources in a sustainable fashion was ground-breaking. RBC® applauds the farming community for its leadership, and the spirit of responsibility and innovation demonstrated across the country. But while much progress has been made, the future success of your farming operation may be dependent on your understanding of your farm’s environmental footprint and your ability to continue to explore and invest in innovative solutions. At RBC, we believe Canada’s farmers ─ supported by the very latest research, science and technology ─ will continue to play an important role in solving the many tough social and environmental challenges ahead while building upon an unprecedented global market opportunity. We are pleased to work with the Farm & Food Care Foundation to help you better understand the environmental sustainability challenge and the many benefits of greening your business, including enhanced productivity, reduced operating costs, opportunities for growth and continued access to markets at home and abroad. We welcome the opportunity to be your banking partner as you lead this change and help to protect Canada’s ecological and economic prosperity for generations to come. Whether you are seeking financing to invest in more efficient equipment, new technology or renewable energy systems, RBC Royal Bank has advice and solutions to help you achieve your goals.

Andrea Bolger Head, Business Financial Services Royal Bank of Canada

Growing from strength

Farmers enhancing productivity with sustainable innovation

W e lco m e f r o m Fa r m & F o o d C a r e F o u n dat i o n

Supporting a sustainable food system Be it for health reasons, environmental concerns or both, all signs point to the fact that consumers are becoming ever more interested in what they eat. Yet, surveys continue to reveal that the majority of Canadians know very little about farming — and want to learn more. At the Farm & Food Care Foundation, a Guelph, Ontario-based national charity founded in 2010, we seek to close this gap by investing in programs to enhance public trust and confidence in Canadian food and farming. These outreach programs about farms, farmers and food cover the five main pillars of sustainable food: safe food, animal health and welfare, economics, human well-being and environmental stewardship. Those not familiar with our excellent food system sometimes wonder if Canadian farmers care about the environment — and the future. At Farm & Food Care, we are proud that farmers are actually the original environmentalists. In fact, you would be hard-pressed to find a Canadian farmer who does not have any regard for the health and well-being of the various ecosystems we all depend on — their farms and families depend on it directly. It is always our goal to leave the land in better shape than when we started farming, for our children and their children and all those Canadians that will follow. Caring for the land, the very lands we call home, is nothing less than a full-time commitment. Given this dedication, we are very pleased to have this opportunity to partner with one of Canada’s oldest companies, RBC Royal Bank. We have been greatly impressed by their own dedication to protecting the environment, especially through their Blue Water program, as well as their passion for helping farmers succeed, both personally and professionally. We, along with other farmers, agri-business and food industry partners are working together closely to encourage dialogue about the future of food production in Canada. The work we are undertaking today to protect our environment will ensure an abundance of good food choices and healthy, prosperous farming businesses for future generations of Canadians, including the farming families who work so hard to grow our food. By working together, we can truly support a more sustainable food system in Canada, a stronger, more resilient agri-economy and a healthy, productive environment.

Bruce Christie Chair

Farm & Food Care Foundation

Farmers enhancing productivity with sustainable innovation 

Growing from strength

Table of contents Introduction: Canadian farmers leading the way3 Drivers of Change


Environmental Dashboard


Land productivity: Doing more with less


Water: Protecting an essential resource 


Ecosystem services: Stewards of habitat and biodiversity


Climate change: Adapting to uncertainty


Bioenergy and biomaterials: Discovering new market opportunities


Next Steps


Resources23 Notes24 About this Report

2 Growing from strength


Farmers enhancing productivity with sustainable innovation


Canadian farmers leading the way In the 1980s, Ontario’s farmers were spending a lot of time complying with a confusing mishmash of environmental standards and becoming increasingly frustrated. “Ninety-nine percent of the time, farmers want to do the right thing for the environment because they live on their farms 24-hours, seven days a week; so it is very personal,” said Gord Surgeoner, then professor, Department of Biology at the University of Guelph. “[I] myself and others in the community knew that we were going to have to work together to set the agenda for environmental sustainability — or wait for society at large to do it for us.” Surgeoner, now president of Ontario Agri-Food Technologies (OAFT), based in Guelph, Ontario, reached out to agricultural leaders, farmers and other stakeholders. Together, they went to the government and asked for a producer licensing system for agricultural pesticide use, along with training to help producers meet the new standard. However, the dialogues about the environment did not end there. In the end, “the conclusion was that we needed to provide a very user-friendly education, self-awareness and learning process for farmers,” recalls Harold Rudy, now executive director of the Ontario Soil and Crop Improvement Association (OSCIA). “We needed to define the expectations — the environmental standards agreed to by government extension, research and farm leaders ensuring practical application in the farm community. We called it the Environmental Farm Plan.” To-date, the EFP program has been met with “exceptional acceptance from the Ontario farm community,” says Rudy, with 35,000 Ontario-based farming families voluntarily committing both their time and hard-earned dollars to completing action items in their plan, often more than once, according to research from Prairie Research Associates Inc.

In 1999, the average investment in environmental improvements by an Ontario farmer was 53 hours and $13,557; 2010 saw this jump to 163 hours and $69,188 per farm, adds Rudy. The program itself depends on dozens of volunteer experts, who sit on 23 subject-matter committees to support the ongoing development and improvement of beneficial management practices (BMPs) for each new iteration of the Ontario EFP program. “We don’t pass judgement on individual philosophies of how people farm, what commodities they produce, or their use of commercial inputs or lack thereof,” he says. “The definitions within the EFP are based on the best knowledge and science of the day. The EFP has something for everyone.”

Farmers enhancing productivity with sustainable innovation 

The real legacy of this hard work in Ontario, however, is evidenced across the country with all 10 provinces and one territory (Yukon) now running successful EFP-like programs (actual names of on-farm risk-assessment programs vary across the country).

According to the latest available data, in 2006, 28% of all Canadian farms had completed an EFP to reduce their environmental risks, which increased to 33% of all farms by 20083. Moreover, the program serves as a model for others around the world. With this level of farm commitment, the Canadian agricultural industry is growing from a position of strength. However, there is work still to be done. The environmental sustainability challenges we face continue to intensify alongside a burgeoning global population and growing demand for diminishing natural resources. More than ever, today, we need our farmers’ ingenuity to continue to discover and implement innovative solutions toward a more sustainable future for Canada — and the world. Canadian farmers can benefit from better understanding how the business of agriculture — indeed global business in general — is evolving to respond to global sustainability challenges. At the same time, stakeholders in the value chain need to appreciate and support Canadian farmers’ efforts in being environmental stewards while they preserve and enhance their ability to earn a fair return. Farmers’ ability to run a profitable, resilient business is increasingly tied to the health of the very ecosystems and natural resources your farm relies on. Incorporating more environmental considerations into your strategic decisionmaking can help uncover new opportunities to reduce risk and enhance your productivity and net profitability. The purpose of this report is to assist farmers in understanding what is causing the global shift to sustainable business, and how these issues and trends might have an impact at the farm level.

Growing from strength 3

Regionally the most common projects adopted by BMP Category through the National Farm Stewardship Program (2003-2009)

british colubia

    

atlantic 14%



33% 7%






18% 14%

Riparian Area Management Preventing Wildlife Damage Product & Waste Management Irrigation Management Others

8% 48%

10% 12%

    





Improved Pest Management Improved Cropping Systems Product & Waste Management Wintering Site Management Others

    

Improved Pest Management Improved Cropping Systems Improved Manure Storage Water Well Management Others









 Riparian Area Management  Manure Land Application  Shelterbelt Establishment  Erosion Control Structure (non-riparian)  Others

    

Improved Manure Management Farm Yard Runoff Control Product & Waste Management Erosion Control Structure (riparian) Others

Source: Agri-Environment Services Branch, 2010. Agricultural Policy Framework Program Analysis. Unpublished work. Reprinted with permission.

The Environmental Farm Plan (EFP) While each province is slightly different, a universal hallmark of EFP programs across Canada is that they are voluntary and confidential. Many use an easy-to-follow workbook to guide farmers through an environmental risk assessment of their farm operation. Workshops and experts are often available for additional assistance. After you complete an on-farm risk assessment, an Action Plan will be created and reviewed, after which you may be eligible for funding to cover a portion of the costs for many of the environmental improvements outlined in your Action Plan. Depending on the province, the EFP review is either done by an expert panel of local farmers experienced with environmental farm issues, or by professional technicians such as agrologists. To get started on an Environmental Farm Plan, see the list of regional resources on page 23. The Environmental Dashboard (page 9) focuses on five top environmental issues relevant to farmers, with an exploration of the business risks and opportunities for each area. Each section of the Dashboard includes brief case studies showcasing how other farmers and organizations are rising to meet the environmental challenge. Finally, at the end of this report, you will find suggested additional resources — websites, tools and guides — you can access to further your knowledge.

4 Growing from strength

Introduction: Case Study Organic “premium” a global opportunity Yvan Montreuil and his three sons have been farming cranberries in central Quebec since 1995. In 2011, Atocas St-Louis inc. received Ecocert certification, and the arduous three‑year process of becoming an organic producer was completed. A key advantage of Ecocert certification, which is overseen by the CARTV (Quebec’s organic standards council), is that it is recognized in Europe and the United States. “What primarily differentiates an organic farm is that we use environmentally responsible pest control methods and avoid using conventional pesticides. That means we have to use more labour intensive methods of weed control (hand-pulling) and insect pest detection. Our costs are higher and our yield is lower, but when we sell our fruit, we receive a higher price than conventionally grown fruit,” Yvan explains. Key cost drivers in going organic are increased labour and vinegar, which is used instead of conventional pesticides and insecticides. But the rewards are clear when the product hits the market. Historically, organic producers have been paid 2 to 2.5 times the price for their fruit. Atocas St‑Louis inc. has also managed to keep their cranberry yields above average. “Normally, an organic farm should produce about 15,000 lbs/acre, and a conventional farm roughly 20,000 lbs/acre. In 2011, our farm had a yield of 22,000 lbs/acre, which has kept us competitive.” For this farm family, going organic has made good business sense.

Farmers enhancing productivity with sustainable innovation

Drivers of Change For many decades, Canadian farmers have improved the productivity of their businesses through the utilization of inexpensive fossil fuel-derived inputs such as fertilizers, fuel and electricity to power everything from tractors to barn lights. This was acceptable when oil prices were more stable and there was a seemingly endless supply of natural resources — a bygone era. However, the rising cost of doing business due to escalating energy prices is but one thread in an ever more complex web of interconnected factors driving major shifts in the business of agriculture. Here, we explore major trends driving change in the sector.

Feeding cities

Peak phosphorous

Today, more than half of our global population — now tipping seven billion – calls a “city” home. This “urbanization of humanity,” noted Anna Tibajuika of UN-Habitat at the World Urban Forum in Vancouver, is unprecedented and means that “the future of the human species is tied to the city4.” One could also argue that our collective future is tied to farmers’ continued ability to feed these cities. In fact, the United Nations expects our global population to surpass nine billion by 2050.

Sources of water, fossil fuels, rare-earth metals and other finite natural resources will become more constrained — and costly — as global demand grows. For famers, future supplies of essential inputs such as soil fertility supplements could pose challenges.

How will we feed so many more in an increasingly urbanized, resource-constrained world? Canadian farmers will continue to find opportunity in helping to satisfy hungry global markets with the provision of safe, high-quality food. Doing so, however, will require increased productivity and continued environmental stewardship.

Hungry for protein Fast-growing developing economies such as India’s and China’s have become important to Canada’s producers; India alone imports 40% of its lentils — a staple in the Indian diet — from Canadian farmers5. These fast-developing nations are not just growing their populations, but their middle classes too. This enhanced purchasing power is stimulating many consumers’ appetites for protein-rich diets, driving greater demand for animal food products. With per capita meat consumption rising, global meat production has already tripled from the 1970s, and risen by 20% since 2000 alone6.

Competing land uses Approximately 7%, or 68 million hectares, of Canada’s land base is now in production for crops, pasture and other types of farming. Despite a multitude of conservation efforts, valuable Canadian farm land — not to mention wildlife habitat — is being lost to urban sprawl each year. This is occurring at the same time as demand for agricultural products is increasing. A hectare of land in 1960 could feed two people; by 2025, the same hectare will need to feed five7. While management and genetics have greatly boosted productivity, especially in the last decade, there will be more pressure on farmers to grow more with less.

Farmers enhancing productivity with sustainable innovation 

Phosphorous is one of the building blocks of life — as necessary to plant cells as water. It is mined from phosphate rock, a non-renewable, natural resource; there is no substitute8. In fact, many experts are now concerned we are approaching “peak phosphorous,” just as we have, in many areas, peak oil9. The term “peak oil” refers to the point in time when the maximum amount of oil that can be extracted from the earth begins to decline as it becomes more difficult and expensive to extract whatever is left. Similarly, as remaining phosphorous reserves become harder and more costly to access, the price for this essential resource is likely to grow, leading to higher input costs for farmers. Consider that a single ton of phosphate is needed to grow 118 metric tons of grain; that alone accounts for 154 million metric tons of phosphate rock shipped around the world for soil fertility10.

The global agriculture business, therefore, must discover new ways to conserve and recycle phosphorous and be more efficient with the fertilizers we already have. While there continues to be a growing gamut of products that can help boost phosphorous-uptake efficiency, farmers may soon find their input costs increasing due to growing global demand for essential, finite agricultural inputs such as phosphorous.

Climate warnings Despite global mitigation efforts, greenhouse gases (GHGs) such as carbon dioxide (CO2) continue to build in the earth’s atmosphere. As of September 2011, atmospheric CO2 levels were at 390 parts per million (ppm), compared to 388 ppm a year ago, and 280 ppm before the Industrial Revolution11. The majority of scientists agree that this build-up of GHGs in our atmosphere is disrupting the earth’s climate and causing global warming.

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Agricultural activities are responsible for 30% of all GHG emissions globally. In Canada, about 10% of all GHG emissions stem directly from agricultural production, excluding those emissions arising from the use of fossil fuels for fertilizer production12. Here again, it should be noted that agricultural crops and their soils also serve as carbon “sinks” — meaning they absorb and store CO2. From 1981 to 2006 Canada’s agricultural soils have changed from a net source of GHG emissions to a sink that sequesters 11.7 Mtonnes of CO2, according to Jamie Hewitt of Agriculture and Agri-Food Canada in Winnipeg. In fact, says one expert, CO2 produced in Ontario ethanol plants is being piped into greenhouses where it can enhance greenhouse production by up to 30%13.

Organic yellow beans, British Columbia

As agriculture intensifies to meet greater demand, the sector’s GHG emissions are also likely to increase, at least in the near-term. Conversely, agriculture will also continue to serve as an important carbon sink, recycling CO2 through its natural cycles. In an effort to mitigate climate change, farmers can expect continued focus on GHG in the form of regulations, guidelines, offset systems or incentives, creating more reasons for farmers to conserve and reduce energy needs and/or to invest in renewable energy solutions. However, the biggest opportunity and potential threat posed to farmers by climate change is related to changing weather patterns affecting growing seasons, an issue explored in more detail further on.

Consumer power Meanwhile, consumers worry about how and where their food is grown. Documentaries, books, media reports, educational guides and social media tools and campaigns (often organized by environmentally minded non-profits) continue to challenge conventional agricultural- and food-production systems. These factors are leading consumers to further question the connection between their food choices, the environment and their health.

Produce in supermarket

Concerns regarding the use of non-biological pesticides and fertilizers, as well as genetically modified (GMO) foods, are driving consumer demand for transparency, not to mention “local” and “organic” products. The market for organic food, farming and products in Canada alone has grown from $2 billion in 2008 to more than $2.6 billion in 2010. Furthermore, many producers are finding new opportunities abroad: exports of organic agri-food products hit $390 million in 201014. In fact, says Agriculture and Agri-Food Canada, global demand for organic products often outstrips what Canada is able to supply15. Many consumers rely on “eco-labels” to help them identify products with environmental and social credentials.

6 Growing from strength

Young cattle in field, Ontario

Farmers enhancing productivity with sustainable innovation

Typically found on the product itself, these labels provide information about how a product was produced (organic, Fair Trade, wind-made) or how it might be consumed (think of the Energy Star label on your fridge or printer). For example, Ecolabel Index is tracking 424 eco-labels in 246 countries, covering 25 industry sectors16. With new labels emerging all the time, concerns are growing about the actual environmental impact such certifications really have and whether or not they help or hinder consumers’ ability to make more informed purchasing decisions.

Investor scrutiny Environmental issues and the risks and opportunities they may pose are now front and centre with large investors. In fact, how a publicly traded company manages environmental issues is viewed not only as proxy for good management but also as material information that investors need to know in order to make informed investment decisions. For example, with the Carbon Disclosure Project (CDP), institutional investors collectively ask managers of the companies they invest in — including many multinational food-product producers — to voluntarily disclose their organization’s strategies related to climate change17. This same model is now used with other environmental-risk areas such as water, and even plastics18, 19, 20.

Supply chain pressure As an essential part of grocery and food-processing supply chains, farmers will also feel more pressure to collect and share information about how their products are produced. In an effort to respond to requests for information from stakeholders, such as investors, to increase their operational efficiencies, bolster competitiveness and attain far-reaching sustainability goals, many multinational food companies and major grocery retailers use life-cycle analysis (LCA). This tool enables an organization to assess the environmental and social impacts of a particular product throughout its life cycle, from the raw inputs stage, through manufacturing and transportation, to end-of-life disposal.

“When ... [food] companies look back to see where their product is coming from, their analysis is showing that the biggest impacts aren’t coming from their own processing or distribution operations, but from their farm-level agricultural supply chains,” notes Gordon Bacon, CEO of Pulse Canada (an organization representing growers of chick peas, lentils and other legumes), in Measuring Sustainable Agriculture. For many farmers, this could be a game changer because your access to domestic and global markets will become increasingly tied to your ability to demonstrate — with measurable outcomes — your farm’s environmental performance and to share that information with multiple stakeholders. Farmers enhancing productivity with sustainable innovation 

McCain, for example, discovered that when they make a French fry, 40% of its carbon footprint is from primary agriculture21. Today, McCain Foods Canada requires its potato farmers to have completed an Environmental Farm Plan and CanadaGAP processes for on-farm food safety. Further, in order to meet the purchasing criteria of McDonald’s Corp., McCain Foods also requires farmers to undertake specific Integrated Pest Management (IPM) practices22. Unilever, a global consumer packaged goods manufacturer of products ranging from shampoos to ice cream, issued its own “Sustainable Agriculture Code” with a long-term goal of only buying from sustainable sources23. We are also seeing Extended Producer Responsibility (EPR) programs taking root across the country. In the past, it was perfectly normal for a manufacturer of an agricultural input to create and sell a product with little attention paid to how it would be disposed of when it was no longer needed. EPR legislation shifts the burden of end-of-life disposal away from municipalities and taxpayers to the manufacturer or retailer, and is gaining momentum across the country. EPR can take the form of voluntary programs or can be mandated by legislation, and often aims to divert materials from landfill through recycling programs. Many collaborative efforts are already underway to engage farmers to help manufacturers and retailers solve the challenge of empty pesticide containers (see page 8).

Bio-based innovation Policymakers throughout Europe, the U.S. and Canada continue to tighten their reins on chemical usage and even, in some cases, have taken agricultural chemicals off the market. The result, says Sanford Gleddie, commercial operations director for Novozymes BioAg Limited in Saskatoon, is a growing market for bio-based innovation in areas such as crop fertility and crop protection.

“The opportunity for more bio-based controls is opening as the regulations continue to tighten on the use of traditional chemical products.” There is also more demand for so-called “green pesticides” — that is, pesticides and fertilizers that are approved for use on organic crops — and this should continue to spawn bio-innovation and, ultimately, an increase in more environmentally responsible products for farmers to choose from, as well as business opportunities for manufacturers. In the U.S., for instance, Minneapolis-based MGK reports 20% growth in its botanically based pesticides, which are certified by the U.S. Environmental Protection Agency (EPA) as having been organic-compliant over the last three years24. While bio-options are growing, they are not likely to eliminate traditional pesticides and commercially concentrated fertilizers for years to come because, say many, you can’t feed a growing world without these supports. “Can we do better

Growing from strength 7

Pigs in a barn, Ontario

with the technology we are using today by supplementing and adding in biological solutions?” asks Gleddie. “Absolutely, but they are additions to, not replacements.” The bottom line for farmers, say experts, is to be prepared. “A lot of farmers are going to get caught suddenly if they devote all their time to their business, and [do] not think that managing environmental concerns is part of that,” says Brian McConkey, a physical science senior advisor with Agriculture and Agri-Food Canada in Swift Current, Saskatchewan. He has been working with the Canola Council of Canada, helping their producers measure the sector’s GHG emissions to comply with new EU regulation (see EU standards for biofuels case study on page 21).

“You might find yourself suddenly driving back with a truck full of produce or hogs, saying, ‘Wow, what am I going to do now?’ Because the buyer won’t take it without environmental documentation,” he says, adding that a good place for farmers to start is to undertake an Environmental Farm Plan, or to update an existing one.

Drivers of Change: Case studies A “local” rush in the Yukon Just a few years ago, if you lived in the Yukon and wanted to eat “local,” you had to go hunting or fishing. But that’s changing, thanks in part to Yukonites’ taste for products produced closer to home. “It is consumer-driven,” says Tony Hill, director of Agriculture for Yukon Energy, Mines and Resources in Whitehorse. We have big grocery stores in the area that are actually actively looking for local products for their store shelves, so this whole ‘buy local’ thing has helped support the agricultural industry in the Yukon.” 8 Growing from strength

CleanFARMS‡ Manufacturers working with farmers to close the loop on farm waste Ever since pesticides came on the market, farmers have had a challenge: what to do with those empty containers. Grant Compton, a third-generation Morell, PEI-based farmer, who works 600 acres of potatoes with his brother and cousin, knows what many farmers used to do. “Once upon a time, farmers would just burn the packaging in the back-forty,” he says, noting that today’s farmers have a more environmentally friendly option, thanks to CleanFARMS, an industry-led, non-profit stewardship organization committed to environmental responsibility through the proper land management of agricultural waste. Recognizing the potential environmental challenge empty pesticide containers might have if not properly disposed of, the crop protection industry voluntarily took action in 1989 to develop a program to take back the containers for recycling for other products. In 2010 alone, more than 4.5 million empty pesticide containers were collected for recycling — a 64% recovery rate. The goal is to attain 80%. “We’ve proven that farmers will participate in great recycling programs like ours if they’re given the tools to do the job,” says Barry Friesen, general manager of CleanFARMS in Toronto. Next on the CleanFARMS agenda — animal health product wastes. Jean Szkotnicki, president of the Canadian Animal Health Institute in Guelph, Ontario, says members of her team are working alongside CleanFARMS to build upon a pilot project for the collection of obsolete and unwanted animal health products from Ontario in 2008 and expand it into Manitoba in fall 2012 — so stay tuned.

Farmers enhancing productivity with sustainable innovation

Environmental Dashboard Land productivity: Doing more with less Land and productivity continues to be enhanced through the use of crop-protection and fertility tools. Fertilizers have become critical inputs, improving soil fertility and yields, with researchers suggesting that nutrient inputs could be responsible for as much as 30%-50% of crop yields25. Fertilized agricultural land increased dramatically between 1971 and the 1980s; though starting in 1986, that rate of increase began to drop considerably, according to one study prepared for Agriculture and Agri-Food Canada26. Fertilizers’ expense per hectare of agricultural land has nearly quadrupled from $5.71 in 1971 to $21.04, according to research from the Centre for the Study of Living Standards in Ottawa27. Similarly, herbicides, insecticides, fungicides and other chemical pesticides are carefully used by Canadian farmers to protect crops — and yields. Nonetheless, improper use of pesticides has contributed to growing concerns about their potential impact on biodiversity, as well as on decreases in crop yields, damaged soil micro-organisms and residue accumulation in food crops that may be harmful to human health28. The cost of fertilizers, as farmers well know, has also grown. According to one study, real expenses in fertilizer use in Canada grew at about 3.75% per annum between 1971 and 2006, hitting $1.42 billion by 2006, compared to about $392 million in 197129.

Progress is being made to reduce inputs: for example, in Ontario, productivity increased as farmers reduced their use of agricultural pesticides by 52% between 1983 and 2003, with other provinces seeing similar declines in inputs30. Profitably increasing the productivity of your land is essential and begins with soil health — the very core of all plant growth. Canadian farmers continue to do a good job protecting their soils and the environment with about 72% of the field crop land currently cultivated in Canada using no-till or conservation best-management practices, says Peter MacLeod, vice-president of chemistry for CropLife Canada in Toronto.

No-till field, Ontario

Farmers enhancing productivity with sustainable innovation 

Growing from strength 9

Crop protection, Ontario

With no-till there is less soil compaction because of fewer passes of the tractor. No-till also increases organic matter, which has a direct impact on soil productivity and saves fertilizer and fuel inputs. Every acre of land under conventional tillage requires 16 litres of fuel per acre versus 12 litres under no-till. Overall, about 116 million litres less diesel fuel is used by Canadian no-till farmers, reducing both their input costs and GHG emissions31.

already being inoculated with rhizobia bacteria, which can reduce and eliminate the need for nitrogen-based fertilizer. Manufacturing companies are continuing their quest to find new, harder-working strains to enhance productivity, helping farmers do more with less.

Precision farming

In Indian Head, Saskatchewan, Dr. Guy Lafond and his team continue work on the development of crop-specific algorithms for western co nditions for use with GPSenabled sensors.

Advances in site-specific farming — or “precision agriculture” — enable many farmers to apply fossil fuelintensive nitrogen fertilizer more strategically to boost yields and reduce costs. Emerging crop-specific precision agriculture technology (see case study) is the tip of a wave of innovation in real-time sensors and small, robotic platforms that scan the field and gather information, without a driver, saving time and labour costs. “As farms get bigger, it becomes very, very difficult for people to really understand what’s going on at a field level,” says Guy Lafond, a production systems agronomist with Agriculture and Agri-Food Canada in Indian Head, Saskatchewan.

Farmer-less farming may sound far-fetched but “autonomous” technology is already being used in mining and defence and being developed for agriculture south of the border32. Crop protection and fertility advances Looking forward, expect more innovation, especially in the area of bio-based solutions. The vast majority of crops — particularly peas and lentils grown in Western Canada and soybeans grown in Manitoba, Ontario and Quebec — are

10 Growing from strength

Land productivity: Case study crop-specific precision farming

It works like this: a light source and optical sensor travel over the crop at the five- or six-leaf stage emitting two specific wavelengths of light, which bounce off the crops. The light reflectance, or bounce, is measured and used to assess the amount of biomass a plant has. The greater the biomass, the greater the plant’s potential. This information is then plugged into an algorithm for that particular crop, which then uses the data along with other data, like growingdegree days, from seeding day to day of sensing; and then determines a more appropriate amount of nitrogen fertilizer for that specific crop at that particular location in the field in order for the plant to realize its full potential. “Because it’s real-time, you don’t have to guess,” says Lafond. “You’re letting the plant tell you exactly what’s happening because everything that the plant has experienced to date is reflected wholly in the plant.” With spring wheat and canola algorithms already completed, Lafond’s team is working on algorithms for malt barley, durum wheat, oat and winter wheat crops.

Farmers enhancing productivity with sustainable innovation

Water: Protecting an essential resource

Whether irrigating field crops or ornamentals in your greenhouse, controlling frost in the fields or watering your livestock, you need access to a steady supply of fresh, affordable water to operate your farming business. While Canada does have 20% of the world’s freshwater supply, climate change is causing new and unpredictable changes in water availability, with some regions facing too much and others too little to meet their needs; take, for example, water scarcity in the prairie regions in Alberta and Saskatchewan and the devastating 2011 floods in Manitoba and Quebec.

In California, water restrictions designed to protect the tiny Delta smelt fish and other species virtually shut down the agricultural industry overnight when Fresno County reduced farmers’ monthly water allotments to zero in 2009, all on the heels of a three-year drought. Unemployment in the county skyrocketed to 41%, and the area was declared a disaster area to boost federal aid34.�

Globally, it is forecasted that the demand for water will outstrip supply by 40% in 203033 as a burgeoning population, urbanization and climate change continue to stress existing water resources.

Closer to home in Alberta, the provincial government has closed the South Saskatchewan River Basin to new water-licence applications; if someone wants to withdraw water from a water body such as a lake or stream, they need to negotiate with another existing water licensee35.� Next door, B.C.’s new Water Plan will require more efficient water use by the agricultural sector starting in 2012. But to be more efficient, it notes, users need to know how much water they are using; and, therefore, it is also requiring all large water users to measure and report their water use36.�

Also, while some regions of Canada are blessed with an abundance of fresh water, there is increasing competition for what we have as our population grows alongside waterintensive industries. As a result, municipalities are rethinking how to best allocate their resources among competing users without stressing natural systems. In some communities, this may result in higher input costs for farmers, perhaps in the form of water-licence fees, water-related regulation and/or consumption restrictions. Farmers might also need to purchase new or improved irrigation-related equipment, or pay more for increasingly expensive energy required to transport water to fields for animals or crops.

Water quality protection Water quality can be negatively impacted by agricultural activities if care is not taken to avoid fertilizer or manure runoff into waterways, which can over-stimulate plant growth in the water and deplete oxygen supplies.

Irrigation pivot over bean crops

Farmers enhancing productivity with sustainable innovation 

Growing from strength 11

For farmers, a key issue related to water is ensuring that you minimize your impact on water quality so as to continue to earn and retain your “social licence” to use water resources within the community. Also, farmers require water for their own use to live and grow quality crops and livestock.

surface, both the stubble and the mulch, you also reduce evaporation rates. So where the water lands, it stays, contributing to crop productivity. That’s water-use efficiency, and for the moment, I think we’re doing pretty well.”

Fortunately, Canadian farmers have already made great strides toward better protecting water quality — and their tacit licences to operate — through their diligent adoption of Environmental Farm Plan best practices such as runoff containment systems and impermeable pads for solid manure storage37.

Farmers in Southern Alberta rely on one of 13 “irrigation districts” to divvy up limited water supplies.

What you do with your water after you use it is also of concern, and here, typical wastewater management strategies involve removal of contaminants, nutrients, sediments and/or pathogens before the water is discharged or used on agricultural lands.

What’s your water footprint? Reviewing water bills as well as installing water meters on withdrawal and irrigation equipment can help you better understand your farm’s water footprint and steps you can take to use less, while taking better care of that which you need. After all, while there may be alternatives for other inputs — solar energy instead of energy from fossil fuels, for instance — there is simply no substitute for water.

Water: Case studies Farming like there’s no water tomorrow The son of a school principal and trained as a teacher, John Bennett started his farming career more than 26 years ago. He now has 1,600 acres under a diverse rotation of pulse crops, mostly peas and lentils, malt barley, wheat and canola, and loves his auto-steer technology. He went to no-till more than 25 years ago, and says it not only improved the soil, but also had the unexpected benefit of dramatically increasing moisture efficiency. “Early on, I was told by a farmer, who’s now long gone but was pretty charitable to a rookie, that if you farm for a drought, you’re seldom disappointed,” says John Bennett, owner of Beckman Farms Ltd., near Biggar, Saskatchewan. “So that’s the way we farm right now. Ours is probably the most water-efficient production out there.” With no-till practices, he leaves the standing stubble behind after harvest, which later breaks down to improve the soil structure with more organic matter, helps keep wind erosion down, and captures and stores moisture. “In our part of the world, there’s two kinds of water: rain and snow. You don’t get any others,” he says. “We try with our tall stubble to capture as much snow as we can. If you can get a bunch of stubble, it melts slower in the spring, so you get a better chance of infiltration into the soil. Plus, by keeping all the crop residues on the 12 Growing from strength

Precision irrigation in Alberta

There are currently 13 irrigation districts, each comprising a group of farmers who collectively own water licences and a distribution network to their farms. Operating similarly to a cooperative, each irrigation district hires staff to manage the distribution of water to the farms. The districts are represented by the Alberta Irrigation Projects Association (AIPA). One of the AIPA’s goals is to increase water efficiency, and so far, they have done so with great success by irrigating 46% more land with 10% less water since 1976. “Basically, we dropped our water use from around 620 millimetres per acre down below 400 millimetres per acre,” says Ron McMullin, AIPA’s executive director in Lethbridge, Alberta. Today’s precision irrigation technology minimizes water loss by reducing drift and providing more uniform water application, which enables farmers to apply less water to the crop and get the same or better yield, he says. The water delivery system has also become more efficient due to gate and valve controls, which are often solar-powered and controlled from laptops. Some of the farmers, he adds, stop and start their irrigation pivots using their cell phones, gauging how much water they need from inground moisture sensors. Farming in dry southern Alberta, he says, means farmers have learned to be strategic about their water inputs. “It’s very unusual for a farmer here to over apply water,” says McMullin, “Any time a pump is operating, it’s costing the farmer money. They want to use only the water that’s going to provide them the most bang for the buck. So they try to optimize their yields, but not always shooting for the very highest yield because that takes more and more water.”

Water and farming — Did you know? Globally, agriculture uses about 70% of the world’s freshwater resources, according to the National Roundtable on the Environment and the Economy38.�In Canada, the agricultural sector was the fourth-largest fresh water user in 2005, accounting for about 9% of total withdrawals, says Environment Canada39.�The federal agency also notes that just over 92% of water used by the sector was used for irrigation purposes40.�Most of the water used for agriculture is not returned to its source; and for some communities, this can be of concern, particularly for irrigated sites.

Farmers enhancing productivity with sustainable innovation

Ecosystem services: Stewards of habitat and biodiversity

To the average Canadian, a farm probably is not the first place one might associate with wildlife habitat, but ask most farmers, and they will tell you their farms may as well be wildlife preserves. Coyotes, bears, deer, groundhogs, and birds, bees and butterflies of every size and colour … Canadian farmers have seen them all. It won’t be a surprise to farmers, then, that Canada’s many farms provide critical habitat for over 550 animal species, half of which are deemed to be animal species at risk41. Many scientists are concerned about declining levels of plant and animal biodiversity in Canada, largely due to loss of habitat from urban encroachment. Experts are also worried about the continued capacity of agricultural landscapes to support plants, insects and other wildlife as farms get bigger and agriculture intensifies42. For example, use of herbicides to eradicate common milkweed plants along roadways is contributing to a decline of breeding habitat and nectar resources essential to the survival of North American monarch butterfly populations43. Farming businesses can also be affected by environmental damage occurring off-farm as it can directly pose risks to the very ecosystem services agri-business relies on, including clean water, erosion regulation, pollination and pest control. Queen bees imported from Hawaii and other tropical climes can cost upwards of $20 each, with their offspring’s pollination services — used on everything from canola crops to apples — valued at more than $2 billion to the Canadian economy44.

At least 90 commercially grown food crops in Canada depend on pollinators like wild bees for fertilization45. For many farmers, imported bees are now a permanent cost of doing business due to disappearing levels of local, natural pollinators. While we need to protect our natural systems, many farmers feel frustrated that their efforts to protect, conserve and even restore natural habitat are not universally recognized — or valued by society at large. It begs the question of who should pay for such investments that benefit everyone. “I think that farmers are really getting squeezed because everybody wants food at a low price, and by the way, they also want a whole lot of environmental benefits and healthy food,” says Ralph Martin, a long-time researcher from the East Coast and currently the Loblaw chair of sustainable food production at the University of Guelph in Ontario.

Cereal plant on rural road, Quebec

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Growing from strength 13

Monarch butterfly on sunflower

More environmental regulation aimed at farmers is not the only answer, says Martin, preferring systems that provide farmers with incentives for their protection of environmental goods and services. “Farmers should not have to bear the burden themselves for providing all the environmental and health benefits of food,” he says. “Society, as a whole, has to find a way to appropriately pay for that.” While not a new conversation, rewarding and incenting farmers to do more to protect the environment appears to be gaining momentum. Environmental Farm Plan and EFP-like programs across Canada have laid a solid foundation for further cost-sharing initiatives and conservation incentives. The benefits of maintaining natural spaces on farmland through the cultivation and protection of woodlots, wildlife corridors, wetlands and wind breaks are not just good for wildlife but good for the productivity of the farm as well due to reduced soil erosion, more resilient micro-climates and the resale value of land, etc. In November 2010, Alberta announced new funding to help develop agricultural GHG offset protocols to enable producers to generate farm revenue while reducing their environmental footprint. “By adopting new practices that will reduce or remove GHG emissions, such as using more fuel-efficient machinery, producers can create opportunities to sell or trade their carbon offsets to

14 Growing from strength

larger industrial emitters, directly benefiting their bottom line,” noted government officials at the time of the announcement46. Alberta is the only jurisdiction in North America with legislated requirements for GHG emission reductions47. A total of 10 agricultural offsets have been approved in the Alberta Offset System48, including reduced tillage, biogas, and biomass and energy efficiency. Conservation land and managed forest taxincentive legislation programs across Canada are also encouraging farmers to maintain natural habitats.

Ecosystem services: Case studies Committed to ecological protection on the farm When Charlie Sytsma met Kim Green back in the 1970s, it was love at first drive. “I think he only married me because I could drive a tractor,” she jokes. Today, the Sytsmas have between 250 and 600 head of cattle at any given time on about 1,200 acres just outside of Athens, Ontario, with additional land devoted to growing grass crops for hay. When it comes to being good stewards of their land, it has been on their radar from day one. “We’re keeners,” says Kim, especially when it comes to caring for their water inputs. While it would be easier to let the cattle drink from the creek, that would risk contamination. So instead, they fenced it off and invested in solar-powered pumps and motion sensors, triggered by the cows themselves, to pump water for the cows. They made dugouts, surrounded by riparian areas, to capture melting snow and rainwater and

Farmers enhancing productivity with sustainable innovation

Winter geese in wheat field

pump water from there into a tank with a motion-sensoroperated float system in the summer. In the winter, the water is pumped into a frost-free bowl with an overflow system to prevent freezing. Other water-protection projects include installing a bridge for cattle to cross the river and installing a pipe from the barn’s eaves troughs under the road to a drainage ditch for biofiltration. The pipe ensures that stormwater does not pass over the road and pick up manure and oil carried on tractor wheels and then run off into waterways. They have also planted trees — more than 3,000 of them — along a mile-and-a-half of creek with the help of local high-school students. The trees stabilize the creek-bed, provide habitat, and in some places, shade for wildlife, which prevents scum from growing on the surface of slow-moving waters in the summer. Since 1995, the Sytsmas have invested more than $90,000 of their own money to upgrade their farm, with about the same in matching funds from the Ontario Environmental Farm Plan program and other local programs. Every penny has been worth it to preserve the land they call home and protect and conserve the natural resources they rely on. “When we bought this farm, the land was pretty marginal; it could barely support the 13 cows we started with,” says Kim proudly. “Now, we’re grazing up to 600 head of cattle here, and we have more wildlife than we’ve ever had.”

Farmers enhancing productivity with sustainable innovation 

Winter wheat for Prairie waterfowl Due to an alarming plummet in the numbers of waterfowl, a North American Waterfowl Management Plan was originated in 1986 by Canada and the United States, followed by Mexico, to restore their populations to 1970s levels. As part of this plan, the Prairie Habitat Joint Venture (PHJV) was established to create and protect breeding grounds. Under the program, Prairie farmers were asked to help by planting winter wheat, which creates habitat for nesting birds because there is no disturbance from spring tilling. Plus, winter wheat’s early spring growth provides valuable cover for nesting ducks in the Prairies. As a result, winter wheat-seeded land has increased from 135,000 acres in 1992 to over 1.1 million in 2007, with nest survival rates double most other habitats, according to PHJV49.� Lee Moats is a Saskatchewan-based farmer who once worked for Ducks Unlimited on this program and worked to help get farmers onside. The challenge, he said, was in convincing farmers that growing winter wheat was a good idea, saying the region has “a long tradition of growing spring crops.” Many farmers, he said, needed to get comfortable with the idea of seeding one crop at the same time as they harvested another. On the upside, he says, one of the many advantages: “The biggest one is of course profitability, and winter wheat has the capacity to produce yields much higher than spring wheat.”

Growing from strength 15

Climate change: Adapting to uncertainty

Farmers know well that our climate is changing. From extreme weather events to wildly fluctuating temperatures and precipitation rates, changes are evident across the country. Canadian temperatures are increasing faster than the global average, with an average 1.3°C rise in temperatures since the mid-20th century50. To better understand how such climate changes will impact our health and communities, scientists continue to model scenarios using sophisticated software. While impacts vary by region, they are expected to include increased frequency and severity of weather events such as floods, storms and droughts, more wildfires and a rise in sea levels. Closer to home, individual farmers can prepare to adapt to a changing climate by better understanding the local risks and opportunities that such changes may present to their operations. For example, agricultural industries in many parts of the country, including Atlantic Canada and areas in the North, may benefit from longer growing seasons due to warming temperatures and more frost-free days51. In water-stressed regions such as the Prairies and the Okanagan Valley in B.C., preparing to adapt may include ensuring you have adequate water supplies. Last year, farmers in parts of the Prairies were faced with the difficult decision of whether or not to seed earlier than normal and risk a frost, or wait and risk low germination due to overly dry soil52.

At other times, too much water is the problem. Blake Lundstrom and his brother Ryan, who farm about 390 acres in Delta, B.C., lost an entire potato crop to heavy rain in the fall of 2010, and then were hit with a wet, cold spring, which delayed their planting by a month53. In Dauphin, Manitoba, the only thing growing on farmer John Hardman’s field in early fall 2011 was volunteer clover; he wasn’t able to seed, let alone get on his field, due to extremely wet conditions. Fortunately, an agronomist advised him that the clover and other weeds taking hold could be a good green manure crop that could yield 90 pounds of nitrogen per acre, so, he noted in an article, “I’m doing the ‘Make lemonade out of lemons’ thing54.” Livestock producers should consider how to water and protect cattle from extreme heat should there be an extended drought. What would be the impact on your current and future earnings should you — and other producers — choose to sell your herd early in the event of an extreme weather event? What impact could less snowfall have on your ability to provide water to your animals? Will your forages withstand excessive heat? Might you need to switch to more drought-resistant varieties?

Flooded fields after rainfall, Alberta

16 Growing from strength

Farmers enhancing productivity with sustainable innovation

As Canada’s climate warms, expect more invasive species to become established, with many potential ecological and economic consequences for farmers, including increased costs to fight pests and disease. According to the Canadian Food Inspection Agency, the economic cost of invasive alien plants to agriculture is enormous: weeds in crops and pastures alone cost an estimated $2.2 billion each year, not to mention the threat they pose to our ecosystems and biological diversity55. While impossible to predict, farmers must also anticipate more extreme weather events such as droughts, tornadoes, hurricanes, hailstorms; and should be prepared to maintain adequate insurance coverage to deal with these extreme events. The bottom line is: more than ever, the only thing certain about climate change is that farmers need to prepare to adapt in order to maintain their resilience and continue to succeed.

Climate change: Case study hedging against the weather Lee Moats’ commitment to protecting the environment through his farming practices is strong; though where exactly it all began remains elusive. “It’s hard for me to place my finger on when all the light bulbs came on,” says the Saskatchewan-based farmer. Nonetheless, he suspects the “blow dirt ridges” on this third-generation family farm — the result of massive

top-soil drifting during the “dirty 30s” depression years — imprinted the necessity of conservation practices upon his childhood psyche. It might also have been his education as an agrologist, work as a soil conservationist with Saskatchewan Agriculture or two decades with Ducks Unlimited Canada. In the latter role, he was instrumental in getting farmers to grow winter wheat to provide critical habitat for declining waterfowl populations, to great success (see page 15). These days, the grower of 2,600-odd acres of cereal grains, pulse crops and oil seeds is increasingly focused on managing weather risks. While Moats says many in the farming community are resistant to the idea that humaninduced climate change is occurring, thinking it is just part of natural cycles, “there isn’t a farmer that you could talk to in southeast Saskatchewan today who isn’t thinking about how the weather situation has become more extreme than in the past.” In 2011, his farm experienced the lowest production of his lifetime due to extreme weather events. “We’ve just been hammered,” he says. Spring flooding meant he could only seed 40% of his acreage. “And as if the wet weather wasn’t enough, we had a hailstorm of epic proportions in August. Six inches of hail covering my fields like snow. It was absolutely spectacular — and it also wiped out my canola crop.” Thankfully, Moats has crop and hail insurance, and will be collecting on both in the same year. It’s all part of being prepared for just about anything.

Hail storm destroys field, Saskatchewan

Photo by Laurie Moats

Farmers enhancing productivity with sustainable innovation 

Growing from strength 17

Bioenergy and biomaterials: Discovering market opportunities

Converging factors — the restoration and protection of valuable ecosystems, the advance of climate change, increasingly finite natural resources and the need to transition to a low-carbon economy — pose many risks to farmers. The flipside of risk, of course, is opportunity. As global demand for energy jumps by an expected 36% between 2008 and 203556,� farmers can anticipate continued higher costs for fossil fuel-based energy inputs. For many, renewable energy might simply mean the use of electricity generated from solar photovoltaic (PV) panels or wind turbines. However, bioenergy, which includes the use of residue from the agricultural production of crops and manure from animal livestock, is a particularly exciting area of opportunity for farmers. Anaerobic digesters can use organic waste materials, including manure and other compostable, agricultural wastes, and mix it with bacteria to produce biogases. The resulting biogas can then be fed into a gas-fired combustion turbine for conversion into usable energy. Waste heat from these micro-turbines can also be captured to provide heat or hot water. In Ontario alone, as of July 2011, there were 28 biogas systems in operation, with another dozen in the works57. As with any new technology, the cost of early adoption can be high, but it will decrease over time. In the meantime, there continue to be more government regulatory efforts and incentive programs to help offset these costs, leading to shorter payback periods and a better return on investment.

Though not without hiccups, Ontario farmers have invested in solar power to take advantage of the Ontario Power Authority’s Feed-In Tariff (FIT) program, which establishes a contract for payment on a kilowatt-hour basis for their renewable energy production. Such investments help create new revenue streams and offset the cost of increasingly higher energy inputs from traditional sources. This program was enabled by Ontario’s Green Energy and Green Economy Act, 2009, which aims to phase out coal-fired electricity in the province by 2014, but also to boost green jobs through the development of renewable energy technologies.

As the world transitions toward a low-carbon future, farmers will have more opportunities to produce feedstock for biofuels and other bio-based products. The global market for bioplastics alone attained sales of $2.74 billion in 2010, and is expected to grow by 32.4% a year from 2011 to 2015, reaching sales of $11.4 billion by 201558�. From “bio-bins” made from switchgrass or wheat straw to soy-based bio-foam for the automotive industry (Ford), companies large and small are investing heavily in R&D to figure out how to make their products without fossil fuels�59.

Canola field

18 Growing from strength

Farmers enhancing productivity with sustainable innovation

Under various innovation agendas, governments will likely continue to support the development of such new and emerging technologies. In Alberta, for example, the government’s Bioenergy Producer Credit was extended to 2016. The program provides a per-litre incentive for generators of bioenergy such as biodiesel or gas made from farm or forest biomass, methane from anaerobic digesters and ethanol from, among other things, agricultural waste60.� The key for you is to do your homework and build a solid business case, just like you would if you were buying a new piece of equipment or a parcel of land. Whether you want to install solar panels or an anaerobic digester to help offset rising energy costs or generate new sources of revenue, look for grants, subsidies and incentives. As with any government program, policies can and do change with little warning, so be aware of regulatory risks.

Bioenergy and biomaterials: Case studies From switchgrass to “bio-bins” Two major Canadian retailers see a bright future in switchgrass. The products are called “bio-bins,” and you can find them in Canadian Tire and Home Hardware stores. The bins look like any other hard plastic item, but it is what’s inside that counts: post-consumer plastics plus natural plant fibres, especially switchgrass grown by Don Nott, president of Nott Farms (Ontario) Ltd., in Clinton, Ontario. The bins were developed with government funding at the University of Guelph’s Bioproducts Discovery and Development Centre by a team lead by professor Amar Mohanty, who runs the Centre. His research shows that the

Farmers enhancing productivity with sustainable innovation 

bins can replace plastics derived from fossil fuels, reduce GHG emissions by 25% and promote carbon sequestration through the growth of the switchgrass crops. They cost up to 10% less than conventional plastics to produce. The biocomposite products are being manufactured by companies in Cambridge and Kitchener, Ontario, under a licensing agreement with the University. In an article published by the University of Guelph, Nott said that he wants to provide more of his crop to make biomaterials to help the environment, and that switchgrass is easy to grow, thrives on marginal land, requires no chemical pesticides, requires very little energy to produce and is more profitable than other crops such as corn or soybeans61.�

Rosa Flora’s “green” house Rosa Flora Ltd. is in the business of growing flowers — lots of them. In an average year, they move about 40 million stems, everything from gerbera daisies to sweetheart roses. Being a greenhouse operation, the owners of the Dunnville, Ontario-based ornamental flower business recognized water as an essential input, and they were concerned that their supply was sometimes a little scarcer in the hotter months. “If we ever ran out of water, that would be a huge problem for us,” explains Joshua Bulk, an owner and post-production manager at Rosa Flora. Their solution was to build a biofiltration system in a series of ponds to clean and recycle the water byproduct from their operation. Another benefit to the pond system is that it also enabled them to recycle nutrients, which cut the costs of their fertilizer inputs.

Growing from strength 19

With 35 acres under glass, Rosa Flora also uses bio-based crop-protection tools such as Integrated Pest Management (IPM). “Once you have a good population of pest-eating bugs in place,” he says, “they sustain themselves for several months — even with all the greenhouse windows open for venting.” The IPM strategy means they also spend less on other crop-protection tools. Concerned about their dependency on fossil fuels, they switched from natural-gas boilers to biomass boilers fuelled by wood chips in 2003. The wood chips are sourced from reputable waste-management companies. Rosa Flora can achieve cost-avoidance opportunities by utilizing biomass versus natural gas, but savings fluctuate along with natural gas prices. “In the past, switching over was very cost-effective for us,” says Bulk. “Considering current market conditions, we would prefer to switch back to natural gas.” In an effort to offset rising energy prices, the company installed a wind turbine in 2006. The German-made turbine generates about 615 kilowatts of energy, which is fed directly into the greenhouse, reducing required electricity from the grid and avoiding costs.

Manure management, Ontario

At the end of the day, every step they have taken toward becoming more sustainable has had a strong business case through increased efficiencies. “It has to make economic sense,” says Bulk. “We’re never going to do something for our business only because it’s good for the environment. There has to be something else alongside that.”

Atlantic farmers fix a woody problem while improving bottom line When it comes to soils, farmers in the Maritimes are at a strategic disadvantage due to the movement of acid rain from the eastern seaboard of the United States, Ontario and Quebec. The acid rain, coupled with a natural lack of alkalinity in Atlantic water and soil systems, has become a major challenge for farmers, says Lise LeBlanc, a nutrient management consultant for LP Consulting Ltd. in Newport, Nova Scotia. Working with local governments, LeBlanc has reviewed up to 90,000 soil tests in the region for a decade and a half, and the results are worrisome: soil pH levels have been steadily declining since 1999 and are “in very, very bad shape,” she says. In fact, 80% of Atlantic soils are below optimal levels. Tragically, in some cases farmers have stopped producing because they cannot afford the increasing amount of lime and fertilizer necessary to neutralize excessively acid soils and feed the soil.

20 Growing from strength

Hydroponic tomato greenhouse, Ontario

Farmers enhancing productivity with sustainable innovation

At the same time, the pulp and paper industry has grappled with its own problem: what to do with mountains of wood ash, a byproduct created as they burn wood to produce biomass energy to power their mills. Traditionally, the wood ash was land-filled, but as municipalities struggle with issues related to bursting landfills, tipping fees are going up. The solution lay in the wood ash itself, says LeBlanc, for not only does the byproduct increase soil pH levels, but it also provides key nutrients — namely phosphorous and potassium. In the past six years, she has worked with pulp and paper companies to help them get their wood ash approved by the Canadian Food Inspection Agency or provincial departments of environment and onto farmers’ fields.

Transporting soybeans, Ontario

“The farmers who use the wood ash can’t believe the payback in terms of improved soil quality and increasing yields,” says LeBlanc, “all for a fraction of the cost of using lime and traditional chemical fertilizers.” In the dairy industry, for example, she says, farmers have been able to dramatically increase their yields of alfalfa forage crops along with protein levels, enabling farmers to produce more milk per cow, resulting in the need to keep fewer cows to meet their quotas. By closing the loop on wood ash, thousands of tons of “waste” have been diverted from landfills and onto farmers’ fields, with an excellent return on investment for all parties. “It’s not only a win-win for both industries,” says LeBlanc, “but also for the environment.”

EU standards for biofuels The transition to a more sustainable global economy is opening doors for farmers such as producing feedstock for biofuels, bioplastics and a myriad of other bioproducts. Access to these exciting new markets will be increasingly limited by farmers’ own environmental performance.

Wind turbines on farm, Ontario

Photo by Bob Henderson

Farmers enhancing productivity with sustainable innovation 

Take the example of canola. With the largest biodiesel market in the world and renewable fuel legislation requiring 10% of all gasoline and diesel fuels to come from renewable sources by 2020, Europe is a prime market for Canada’s high-quality canola. A renewable-energy directive from the European Union (EU) government, however, requires stakeholders throughout the entire value chain to meet specific criteria. Among their requirements: no land used to produce the biofuel feedstock can have been cleared after January 1, 200862. These new rules could pose market challenges for Canadian farms that are not able to adhere to these EU policies. The Canola Council of Canada has created an information package to help producers prepare at

Growing from strength 21

Next steps We hope that this discussion of the many risks and opportunities that the environmental sustainability challenge presents for the agricultural sector has been both helpful and motivating — and that you feel better prepared to strategically position your farm business for the future. If you have not yet done so, an ideal place to start is to create your own Environmental Farm Plan. It is recommended that those who have already undertaken a plan consider updating it if it is more than two or three years old. By doing so, you will keep abreast of critical environmental issues in your region, including, in many cases, more information about new or upcoming regulations, incentives and beneficial management practices. Remember, however, that the best policy is to remain proactive and strategic. While the EFP is an important and fundamental tool, it is not the only one. With the urgency of the environmental challenge upon us, expect significant innovations fuelled by science and technology to support your efforts to run a more sustainable, restorative and, ultimately, profitable agricultural business.


RBC, Farm & Food Care Foundation and ThinkSustain Consulting would like to thank the following individuals for lending their time and expertise to participate in the development of this Report (in alphabetical order): Larry Antosch, Ohio Farm Bureau, Ohio; John Bennett, Beckman Farms Ltd., Biggar, Saskatchewan; Joshua Bulk, Rosa Flora Ltd., Dunnville, Ontario; Dolores Durant, Integrated Natural Resources, Agri-Environment Services Branch, Ottawa, Ontario; Barry Friesen, CleanFARMS, Etobicoke, Ontario; Sandford Gleddie, Novozymes, Saskatoon, Saskatchewan; Peter Hannam, Woodrill Farms, Guelph, Ontario; Deborah Henderson, Institute for Sustainable Horticulture, Kwantlen Polytechnic University, Surrey, British Columbia; Jamie Hewitt, Agri-Environment Services Branch, Agriculture and Agri-Food Canada, Winnipeg, Manitoba; Tony Hill, Yukon Energy, Mines and Resources, Whitehorse, Yukon; Suren Kulshreshtha, Department of Bioresource Policy, Business and Economics, University of Saskatchewan, Saskatoon; Guy Lafond, Indian Head Research Farm, Agriculture and Agri-Food Canada, Indian Head, Saskatchewan; Lise LeBlanc, LP Consulting Ltd., Newport, Nova Scotia; Crystal Mackay, Farm & Food Care Foundation; Peter MacLeod, CropLife Canada, Toronto, Ontario; Ralph Martin, University of Guelph, Ontario; Brian McConkey, Agriculture and Agri-Food Canada, Swift Current, Saskatchewan; Ian McKillop, Farmer, Dutton, Ontario; Ron McMullin, Alberta Irrigation Projects Association, Lethbridge, Alberta; Lee Moats, LLAMM Acres, Riceton, Saskatchewan; Yvan Montreuil, Atocas St-Louis inc, St-Louis de Blandford, Quebec; Harold Rudy, Ontario Soil and Crop Improvement Association, Guelph, Ontario; Nadine Sisk, CropLife Canada, Ontario; David Stanley, Syngenta Crop Protection, Guelph, Ontario; Dr. Gord Surgeoner, Ontario Agri-Food Technologies, Guelph, Ontario; and Jean Szkotnicki, Canadian Animal Health Institute, Guelph, Ontario.

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Farmers enhancing productivity with sustainable innovation

Resources  RBC Royal Bank’s Greening Your Business website offers valuable resources, free for downloading, on a variety of topics including retrofits, green buildings, waste management and many more. Visit  If you are interested in solar panels, visit RBC Royal Bank’s Solar Panel Financing web page at business/financing/solar-panel-financing.html.  Ontario BioAuto Council. Look for the “Industries” tab for a section on use of agriculture’s fibres, starches and oils in the auto industry at industries/agriculture.  Agriculture and Agri-Food Canada ( Find helpful tools in the “Agri-Environment” section, featuring helpful tools and resources to help farmers implement more sustainable agricultural systems, including information about going organic. Climate-related resources include a drought map and drought-related advice for crops, livestock, pasture, pest management and water, as well as advice on post-flood situations including detailed information on managing wet soils and maintaining safe water supplies. Holos is a wholefarm modeling tool you can download and use to help you estimate and reduce your farm’s greenhouse gas (GHG) emissions. You can find Holos under the “Agri-Geomatics” section at =1226606460726&lang=eng.

 The Natural Resources Canada (NRCAN) Office of Energy Efficiency website offers a host of resources for home and businesses at  NRCAN’s CanmetENERGY site includes information about renewable forms of energy, including wind and solar energy at  Canadian Agri-Food Policy Institute or CAPI ( is an independent, non-partisan organization, established by the federal government in 2004 to focus on policy issues related to viability, sustainability and wellness in the agrifood sector. In February 2011, it issued a comprehensive discussion paper called “Canada’s Agri-Food Destination — A New Strategic Approach.” Farmers are invited to download the report, available on their website, and join in the discussion at  Farm & Food Care Foundation. For an interesting overview of topical issues of interest to the Canadian public, including the environment, see the “Real Dirt on Farming” booklet on the Farm & Food Care website at  RBC believes that preservation of the environment is fundamental to the sustainability of our communities, our clients and our company. To learn more, please read the RBC Environmental Blueprint available at

Your Environmental Farm Plan — Where to start Currently, agri-environmental risk-assessment programs such as EFPs and cost-share incentive funding for farmers to implement action plans are supported through the Federal-Provincial-Territorial Growing Forward Agriculture Policy Framework and locally delivered. Jamie Hewitt of the Agri-Environment Services Branch, Agriculture and Agri-Food Canada, suggests the following starting points for your region: British Columbia — B.C. Agricultural Research and Development Corporation: Alberta — Alberta Government, Agriculture and Rural Development: Saskatchewan — Provincial Council of ADD Boards: Manitoba — Manitoba Government, Manitoba Agriculture, Food and Rural Initiatives: Ontario — Ontario Soil and Crop Improvement Association: Quebec — Clubs conseils en agroenvironment: New Brunswick — Agricultural Alliance of New Brunswick: Nova Scotia — Nova Scotia Federation of Agriculture: Newfoundland — Government of Newfoundland and Labrador, Department of Natural Resources: land_use/envplanning.html Prince Edward Island — PEI Federation of Agriculture: Yukon — Government of Yukon, Energy Mines and Resources:

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“Producers” web page. Agriculture and Agri-Food Canada. (accessed 2011). “An Overview of the Canadian Agriculture and Agri-Food System 2011.” Agriculture and Agri-Food Canada. (accessed 2011). 3 “Environmental Farm Planning in Canada: A 2006 Overview.” Agri-Environmental Services Branch, 2009. Catalogue No. A125-15/2011E-PDF. 4 Warah, Rasna, and Eduardo Lopez Moreno. “Harmonious Urbanization: The Challenge of Balance Territorial Development.” Background Paper, World Urban Forum: 4th Session, United Nations, Nanjin, China. UN Habitat, 2008. 5 “Canada’s Agri-Food Destination: A New Strategic Approach.” Canadian Agri-Food Policy Institute (CAPI), Ottawa: CAPI, 2011. 6 Chang, Jesse. “Meat Production and Consumption Continue To Grow.” Vital Signs — Worldwatch Institute, October 11, 2011. (accessed October 19, 2011). 7 “Crop Protection Products and Plant Biotechnology.” CropLife Canada. (accessed September 25, 2011). 8 Pearce, Fred. “Phosphate: A Critical Resource Misused and Now Running Low.” July 7, 2011. (accessed September 20, 2011). 9 Elser, James, Stuart White. “Peak Phosphorous.” April 20, 2010. articles/2010/04/20/peak_phosphorus (accessed September 20, 2011). 10 Pearce, Fred. “Phosphate: A Critical Resource Misused and Now Running Low.” July 7, 2011. (accessed Oct. 1, 2011). 11 “Trends in Atmospheric Carbon Dioxide.” NOAA — Earth System Research Laboratory. August 2011. (accessed September 24, 2011). 12 “Climate Change.” Agriculture and Agri-Food Canada, September 24, 2010. AAFC-AAC/ (accessed Oct. 27, 2011). 13 Peter Hannam, seed and crop farmer. 14 “Government of Canada Celebrates Organic Week by Helping Boost International Markets for Producers.” Agriculture and Agri-Food Canada, October 21, 2011. php?s1=n&s2=2011&page=n111021 (accessed October 26, 2011). 15 “Value Chain Roundtables.” Agriculture and Agri-Food Canada. (accessed October 26 2011). 16 “Ecolabel Index.” 2011. (accessed Dec. 11, 2011). 17 Investor CDP. Carbon Disclosure Project, 2011. CDP-Investors.aspx (accessed September 15, 2011). 18 CDP Water Disclosure. Carbon Disclosure Project, 2011. Pages/CDP-Water-Disclosure.aspx (accessed September 6, 2011). 19 “Murky Waters? Corporate Reporting on Water Risk — A Benchmarking Study of 100 Companies.” Ceres. (accessed February 20, 2010). 20 “Plastic Disclosure Project, Launched at Clinton Global Initiative’s Opening Plenary, Receives Support From Global Asset Managers with Over $5 Trillion Investments Under Management.” PRNewsire, Sept. 21, 2011. (accessed Sept. 21, 2011). 21 Pelletier, Ghislain, corporate vice-president for Agriculture, McCain. Quoted in: Anstey, Chris. Measure What Matters: The Search for Farming’s Triple Bottom Line. Pulse Canada, November 2010. 22 Information supplied by Jamie Hewitt, Agri-Environment Services Branch, Agriculture and Agri-Food Canada. Based on an interview with Yves LeClerc, McCain Foods Canada. 23 Anstey, Chris. Measure What Matters: The Search for Farming’s Triple Bottom Line. Pulse Canada, November 2010. 24 Redell, Charles. “Organic Farming and the Rise of ‘Green Pesticides.’” October 14, 2011. (accessed October 14 2011). 25 de Avillez, Ricardo. “A Detailed Analysis of the Productivity Performance of the Canadian Primary Agriculture Sector.” Centre for the Study of Living Standards, August 2011. (accessed December 10, 2011). 26 Ibid. 27 Ibid. 28 Ibid. 29 Ibid. 30 “The Real Dirt on Farming: The People in Canadian Agriculture Answer Your Questions.” (accessed Dec. 19, 2011). 31 “Crop Protection Products and Plant Biotechnology.” CropLife Canada. (accessed September 25, 2011). 32 Berry, Ian. “Teaching Drones to Farm.” Wall Street Journal. 405311190337400457658092144875213.html (accessed September 22, 2011). 1 2

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C DP Water Disclosure Global Report 2011: Raising Corporate Awareness of Global Water Issues. Carbon Disclosure Project, London, U.K., 2011. 34 Verma, Sonia. “How Green Was My Valley: California Drought.” The Globe and Mail. July 24, 2009. 35 Interview with Ron McMullin, Alberta Irrigation Projects Association, Sept. 21, 2011. 36 “Water for Agriculture.” B.C. Government 37 Environmental Farm Planning in Canada: A 2006 Overview. Agri-Environmental Services Branch, 2009. Catalogue No. A125-15/2011E-PDF. 38 Changing Currents: Water Sustainability and the Future of Canada’s Natural Resource Sectors. National Roundtable on the Environment and the Economy (NRTEE), June 2010. 39 “Withdrawal Uses: Agricultural Use.” Environment Canada. asp?lang=En&n=851B096C-1#agriculture (accessed Oct. 25, 2011). 40 Ibid. 41 Canadian Biodiversity: Ecosystem Status and Trends 2010. Canadian Councils of Resource Ministers, Federal, Provincial and Territorial Governments of Canada, 2010. 42 Ibid. 43 Crolla, Jeffrey P. and J. Donald Lafontaine. “Status Report on the Monarch Butterfly (Danaus plexippus) in Canada.” canmon2.htm (accessed Dec. 20, 2011). 44 Mathieu, Emily. “Queen Bees Blocked at Border.”, February 27, 2010. (accessed September 2, 2010). 45 “On-Farm Biodiversity.” Agriculture and Agri-Food Canada, 2011. (accessed July 15, 2011). 46 “New Investments Driving a More Environmentally Friendly Agriculture Industry.” Government of Alberta Agriculture and Rural Development, November 10, 2010.$department/deptdocs.nsf/all/com12952 (accessed September 15, 2011). 47 Ibid. 48 “Overview of Alberta’s Agricultural Carbon Offset Trading System 2007 to 2010.” Government of Alberta Agriculture and Rural Development.$department/deptdocs.nsf/all/cl13212 (accessed Dec. 20, 2011). 49 “Accomplishments.” Prairie Habitat Joint Venture website. (accessed July 10, 2011). 50 Changing Currents: Water Sustainability and the Future of Canada’s Natural Resource Sectors. National Roundtable on the Environment and the Economy (NRTEE), June 2010. 51 A Changing Climate: National Roundtable on the Environment and the Economy (NRTEE) and the Royal Canadian Geographical Society, 2010. 52 “Adapting in a Climate of Change: Planning for Agronomic Issues.” Agknowledge (University of Saskatchewan, College of Agriculture and Bioresources), no. 01 (2011): 20-22. 53 Hamilton, Gordon. Profits Prove a Tough Crop To Grow for B.C.’s Conventional Farmers. June 11, 2011. armers/4931307/story.html (accessed August 15, 2011). 54 Garvey, Scott. “Unusual Season Calls for Unusual Field Management.” Sept. 12, 2011. (accessed Sept. 20, 2011). 55 “Invasive Alien Plants in Canada — Summary Report.” Canadian Food Inspection Agency. 56 World Energy Outlook 2010 Factsheet. International Energy Agency, 2010. (accessed Oct. 1, 2011). 57 Swystun, Rob. “Bioeconomy Gives Agriculture New Lease on Life.” July 28, 2011. (accessed October 4, 2011). 58 “Global Bioplastics Market to Surpass $11 Billion by 2015.” Environmental Leader, February 3, 2011. (accessed February 3, 2011). 59 Makower, Joel. “Bioplastics Become Material.” February 17, 2011. blog/2011/02/17/bioplastics-become-material?page=full (accessed February 17, 2011). 60 “Alberta To Extend Biofuel Production Incentive.” Alberta Farmer Express, March 25, 2010. (accessed October 5, 2011). 61 [Source for entire case study] Vowles, Andrew. “Bio-Bins Are U of G Innovation.” May 5, 2011. (accessed Nov. 15, 2011). 62 European Biodiesel Market — Sustainability Certification for Growers. Canola Council of Canada. (accessed Sept 12, 2011). 33

Farmers enhancing productivity with sustainable innovation

About this report Report on Business & the Environment: agriculture 2012 is the third in a series aimed at helping leaders of Canadian organizations in different sectors better understand and benefit from the risks and opportunities presented by the environmental sustainability challenge. This Agricultural 2012 Report is the product of collaboration between two partners — RBC and Farm & Food Care Foundation — in association with ThinkSustain‡ Consulting. RBC provides personal and commercial banking, wealth management, insurance, corporate, investment banking and transaction processing services on a global basis. We serve close to 15 million personal, business, public sector and institutional clients through offices in Canada and 56 other countries. We are committed to proactive and prudent management of the environmental aspects of our business and have had a corporate policy on the environment since 1991. We believe that the preservation of the environment is fundamental to the sustainability of our communities, clients and company. More and more Canadian companies are realizing the significant benefits to be gained by building environmental sustainability into their businesses. To support our clients on this journey, we have created many resources available at The Farm & Food Care Foundation is a charitable organization that works to cultivate passion for food and farming in Canada, communicate the facts about farming and food production; and that collaborates with all sectors of this industry. Today, less than 2% of Canadians live on farms. This has led to a disconnect between the farm and consumers. Because agriculture impacts our individual, social, environmental and economic well-being, Canadians need accurate information to make informed food choices. Canadian farmers now use fewer resources, less land per unit of output and better technologies to feed a rapidly growing population. By continuing to invest in technology and innovation, farmers can continue to use fewer resources while maintaining responsible production, processing and distribution methods. It is the right choice for people, animals and the planet. The Foundation is investing in innovative, new strategies to engage Canadians and make sure they have easy, timely access to reliable information about food and farming. Please visit ThinkSustain Consulting is a Canadian-based boutique consultancy that helps organizations become more environmentally, socially and economically sustainable through strategic planning, communication and stakeholder engagement. For more information, please visit Greening this guide. This is a carbon neutral publication; carbon dioxide (CO2) equivalent emissions associated with the production and distribution of this report have been neutralized through the purchase and retirement of certified emission reductions (CERs). CERs are subjected to a rigorous validation, certification, registration and insurance process designed to ensure real, measurable and verifiable emission reductions that are recognized under the Kyoto Protocol. The CERs were acquired through RBC’s in-house emissions trading group within RBC Capital Markets. For more information about services for farms and agri-businesses, please visit or

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The contents of this publication are provided for informational purposes only and are not intended to provide specific advice on your business operations and should not be relied upon in that regard. Not all methods described herein will be appropriate in all cases. Before implementing any strategy, you should speak to an expert about your particular business and create a plan that is designed to suit your requirements. ® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. © Royal Bank of Canada, 2012. All rights reserved. ‡ All other trademarks are the property of their respective owners(s). VPS66564 

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Report on Business & the Enviornment  

Report on Business & the Enviornment. Ontario Sheep