Asia’s rise is a ‘golden opportunity’ for Canadian farmers and agricultural processors, report says

Canada’s agri-food sector has the potential to become a growth engine for the entire economy if the federal government moves quickly to negotiate preferential trade agreements with fast-rising Asian markets, a new report concludes.

“The rise of China, India and other emerging markets has dramatically changed the outlook for Canadian farmers and agricultural processors,” says Michael Gifford, Canada’s former chief agricultural trade negotiator and the author of the report.

Titled “Golden Opportunities and Surmountable Challenges: Prospects for Canadian Agriculture in Asia”, Mr. Gifford’s paper is the fourth in a series of reports commissioned by the Canadian Council of Chief Executives (CCCE) to explore the impact on Canada of Asia’s growing economic power.

The views expressed in the paper are those of the author and do not necessarily reflect the position of the CCCE or its members.

Mr. Gifford notes that, for decades, Canada’s agri-food sector has struggled with boom-and-bust cycles, frequent surpluses and low farm incomes. As in many other industrialized countries, agricultural production increased rapidly in the second half of the 20th century, outstripping population growth.

However, the rise of China, India and other emerging markets is driving major changes in the global agri-food market. Across Asia, rapid urbanization and income growth are contributing to an unprecedented expansion in the number of middle class consumers, and a consequent increase in demand for meats, vegetable oils, dairy products, fruits and sugar as well as processed food and restaurant meals.

All of this augurs well for countries such as Canada that are net agricultural exporters, Mr. Gifford says. “Asia’s expanding appetite for imported food provides Canadian agricultural producers with golden opportunities to grow and prosper – provided that the federal and provincial governments and industry work together to identify and overcome a variety of external and internal challenges. “

Chief among those is the need to ensure that Canada is not locked out of key preferential trade agreements that will increasingly shape the future of international commerce. In particular, Mr. Gifford stresses the importance of ensuring Canada’s participation in the Trans-Pacific Partnership (TPP), a regional trade agreement currently being negotiated among Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

Canada recently asked to join the TPP, but the United States, Australia and New Zealand have yet to agree, citing among other concerns the federal government’s unwillingness to provide increased import access to Canada’s highly protected, supply-managed dairy and poultry sectors.   

For his part, Mr. Gifford says that supply management “need not be an insurmountable challenge” to Canada’s broader trade ambitions. He points out that many other countries restrict certain kinds of agricultural imports, and that the most likely outcome of the TPP negotiations is therefore an agreement that results in a partial rather than complete liberalization of the most sensitive sectors.

At the same time, he says that Canada should be taking steps now to help protected sectors prepare for a future in which agricultural trade liberalization is not only inevitable, but very much in Canada’s national interest.

“Political sensitivities notwithstanding, the rest of the economy, including the 80 per cent of Canadian agriculture that is tied to world prices, cannot afford to be held hostage to demands by dairy and poultry producers to preserve the status quo,” the report says.

The CCCE is the senior voice of Canada’s business community, representing 150 chief executives and leading entrepreneurs in all sectors and regions of the country. Its members lead companies that collectively administer $4.5 trillion in assets, employ more than 1.4 million men and women and are responsible for most of Canada’s private-sector exports, investment and training.

Later this year, the CCCE will host “Canada in the Pacific Century,” a conference bringing together more than 200 top CEOs, senior government officials, educators and other leaders from across Canadian society. The goal of the conference is to consider strategies that will ensure Canada’s success in a world in which economic power is shifting to Asia.

For more information about the conference and the publication series, visit www.PacificCentury.ca.