Farm Credit Canada's economics team has identified three trends or disruptors to watch in the Canadian agri-food supply chain for 2020. Those include climate change, protectionism, and automation.
“We call them disruptors for the simple fact that these trends could significantly change the way Canadian farm operations, agri-businesses and food processors do business at home and around the world,” said J.P. Gervais, FCC’s chief agricultural economist. “The test is how they will adapt to take advantage of the opportunities or mitigate the challenges that come with each of these trends.”
According to Canada’s 2019 Climate Change Report, Canada is warming at twice the rate of the rest of the world.
“As we’ve witnessed in recent years, weather disruptions can lead to production losses across major agriculture producing regions, and this has serious and rippling repercussions for Canadian agriculture and food sectors,” Gervais said.
FCC says protectionism contributes to market volatility, which has an overall detrimental impact on the world economy. Gervais notes that Canada has done extremely well in establishing strong trade relations in a number of key markets, thanks to a long-held focus on getting trade agreements in place.
“Our trade agreements help buffer Canada from some of the negative impact that growing protectionism is having on the world economy,” he said. “When tariffs are imposed or borders close for any number of reasons, having a broader range of export markets allows Canadian exports to be re-allocated, rather than simply reduced.”
Gervias says despite global economic turmoil, the outlook for Canadian agriculture and food in 2020 remains positive due to ongoing investments in technology and innovation. He adds these investments enable Canada to produce a wide range of commodities and processed foods, which helps the country maintain its competitive position in the world export market.
Advances made possible due to automation in both agriculture production and food processing reduce costs and with interest rates expected to remain low, the environment for continued investments in innovation and technology looks positive, Gervais said. In processing, automation helps solve the long-term challenge of labour shortages, especially for skilled manufacturing labour.
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