OPINION
THE WESTERN PRODUCER | WWW.PRODUCER.COM | SEPTEMBER 29, 2016
11
& OPEN FORUM FARM POLICY
PEERING INTO THE CRYSTAL BALL
Ag policy talks must think big
Are you ready for the future?
BY AL MUSSELL
Federal, provincial and territorial governments are working on renewing Canada’s agri-food policy with the current agreement (Growing Forward 2) expiring in 2018. But what kind of new agreement will we have for 2018? Will it be a retrofit of our existing set of programs with changes in design and budget, or will it be a more robust consideration of Canadian agrifood sector evolution, and some of the challenges we will meet in the future? The evidence is compelling that the program/budget retrofit model … will eventually break down under the weight of disruptive changes coming at us in the future, looking out to the early 2020s. This is true in a variety of respects. The Census of Agriculture, with its initial results expected out in 2017, is likely to confirm the entrenched trend toward fewer farms overall, but larger ones…. Surely, the pressures on farms in the different size categories are different, and programming for stabilization and adjustment is seen as important. Yet, business risk-management programming has been one-sizefits-all, and as the trend toward disparity of farm sizes increases, it becomes increasingly likely that nobody will be well served. The trade agreements (the Comprehensive and Economic Trade Agreement between Canada and European Union and the TransPacific Partnership agreement)
Business risk management programs are important to farmers. What will the next suite of programs look like? | FILE PHOTO negotiated by Canada during the Growing Forward 2 period were monumental and potentially transformative, but these are not yet ratified. With doubt now cast on both agreements, policy must contain a Plan B for growth in agrifood, apart from these deals. Agriculture produces about 25 percent of methane in Canada and about 70 percent of nitrous oxide emissions, so the industry cannot blithely talk about beneficial management practices and environmental farm plans while provincial, territorial and federal governments are already working on g re e n h o u s e ga s a n d c l i mat e change adaptation policies, along with carbon tax or cap-and tradeinitiatives. As a user of fossil fuels and petrochemicals, agri-food cost struc-
tures could be significantly impacted by these policy initiatives. Yet with its abundance of land and natural resources, agriculture could also be a critical solutions provider. But what can reasonably be expected from agri-food, both in terms of a contributor and a means of mitigating climate change? As never before, other segments of the economy will look to agri-food, potentially as a climate bad actor to be reigned in, or, with the help of innovative policy, a leading source of mitigation to be supported. Today, … the agri-food stakeholder group has broadened to include groups concerned about agricultural production technology, processing methods, labelling, genetics, health, local food systems, farm families, and more. The influence of these groups is growing, especially
in the restrictive marketing of food products with traits seen as “sustainable,” and agriculture comes from somewhat of an isolated position in public policy to engage these concerns. Communications strategies to convince the public that Canadian farm and food products are safe and healthy, and that farmers are great people, tend not to convince those already skeptical of the message. These issues are exceptionally broad and deep, but real. The current, scheduled dialogue on agrifood programs and spending offers a unique opportunity to go further to tackle them, and many of these issues have been identified in the current process. However, extensive research and broader public dialogue will be required to anticipate issues and engage them in innovative policy. The prospect of fixing the current program set to work in this environment is just too limiting. The risk is that the current dialogue and ultimate agreement will be both too small in ambition and too safe in scope. Governments and the industry should demand a new federal-provincial-territorial policy agreement that is more about fulsome policy direction and shaping ourselves for what is to come, building on a five-year agreement on programs and spending, with a process to get us there.
Al Mussell is research lead at Agri-Food Economic Systems in Guelph, Ont.
CROPPING DECISIONS
Watch for canola acreage to increase in 2017 HURSH ON AG
KEVIN HURSH
A
year ago at this time, it was already becoming clear that 2016 was going to see a huge increase in lentil acreage. However, there’s no shining star and no obvious winner in the acreage battle as we look forward to 2017 cropping decisions. Canola could come out with a big increase by default. It’s reasonable to assume that lentil acreage will slip. Red lentils were 35 cents a pound off the combine last year, and by mid-December the price had skyrocketed to 55 cents. Attractive new crop lentil contracts were available in the early fall, months ahead of the normal time. Little wonder that more lentil acres than ever before went in the
ground. These days, red lentils are less than 30 cents with little indication of any looming price rise. Lentil buying companies are trying to manage their way through a maze of low quality samples. Any crop contracts for next year are likely months away and may not appear overly attractive when they are finally available. Mustard contracts were also launched early last fall, and the crop saw a significant acreage increase this spring. This fall, production is up, prices are on the defensive, contracts will likely be delayed and next year’s acreage will likely slip a bit. This year’s durum crop has major fusarium issues, increasing price prospects for high quality durum. Will that encourage more acreage next year or will producers remember all the problems with disease and cut back on the crop? The world seems to be awash in wheat and feed grains. Feed barley and oat prices are lacklustre at best. Malting barley is attractive, but the committed long-time growers will get the first crack at new crop pro-
duction contracts. With a strong possibility that lentil, durum, wheat, barley and oat acreage will all be down, canola is the most likely crop to take up the slack. Producers are not impressed by the ever-increasing price of canola seed, but that will be more than offset next year by the decrease in fertilizer prices. Additionally, as more shatter resistant varieties become available, there’s a major move to straight cutting canola, which saves the time and expense of swathing. Weed control was an issue in many crops this year, particularly in lentil. With its three different herbicide tolerance systems, canola might be viewed as a cleanup crop. As well, canola doesn’t dominate acreage in the traditional lentil growing region like it does elsewhere, giving it room for an acreage increase. Tight canola rotations have become the norm In the many other regions where canola already commands most of the acres, and so far most of the disease issues
have been manageable. Canola prices aren’t great, but they’ve shown more strength than many observers expected. As well, the dockage issue with China has been solved for the foreseeable future. A lot of producers stick with a set rotation and don’t vary their crop mix a great deal from one year to the next. Others adjust cropping plans based on agronomics and relative returns. It’s a long time until spring and ma n y o f t h e v a r i a b l e s c o u l d change, but cropping decisions are already being made. None of the crops is attracting attention for runaway price increases. In fact, the general pricing trend is stable to soft. While it may not come with a great deal of fanfare, watch for canola to quietly pick up acres from a variety of other crops for a variety of reasons.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.
EDITORIAL NOTEBOOK
BRIAN MACLEOD, EDITOR
T
he world of agriculture is changing so fast — from top to bottom — that over the next few years, we may be wondering, “what have we done?” Two years ago, Agri-Trend’s Rob Saik wrote a book called The Agriculture Manifesto, which predicted massive change in the industry, driven by 10 factors such as “nonscience” skeptics, high-tech advances and market segmentation. I read it when I was still fairly new to agriculture. Now that I’ve been reading The Western Producer cover to cover for two years, it’s a more interesting read. But what’s happening now can both support and disrupt agricultural achievements, or even create an alternative universe. The mergers and takeovers loom large: Bayer-Monstanto, ChemChina-Syngenta, Dow-DuPont, Potash Corp.-Agrium. The mining industry in Ontario consolidated a few years back. The former Inco Ltd., a Canadian company, was the largest nickel mining company in the world. But it needed billions of dollars in capital investment to upgrade its mines. So it was bought by Brazilian mining giant Vale, which provided that capital, but also imposed its labour outlook on the miners, causing a year-long strike. What will the compendium of advantages and disadvantages look like with the massive consolidation in agriculture? Then there are the trade deals. The Trans-Pacific Partnership, negotiated between 12 Pacific Rim countries, would open new markets for North American farmers. But it’s increasingly being threatened. So is the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. And what of technological advancements? We used to look at drones as cool new technology that supports agronomy, and they do, but now we’re looking at such things as robot tractors that could make harvest more practical and profitable. (Saik’s book talks about artificial intelligence that may be able to sift through volumes of farm data to improve farm management.) Some of this is incremental; some of this is game changing. But what effect will mergers, politics, protesters, economies of scale and scientific skeptics have on all this? Several years from now, we may indeed ask, “what have we done?” Or we may ask, “why didn’t we do better?” brian.macleod@producer.com