Yahoo Finance Canada's moonshot: The green farming revolution is here, but we must help it grow
By John Stackhouse, Evan Fraser and Keith Halliday
Every day Kristjan Herbert, a farmer in Moosomin, Sask., looks at his phone to find out what his soil is telling him about plant health, fertilizer levels and even up-to-the-hour yield forecasts. He knows that, in order to feed a growing population sustainably, his soil must be at its healthiest.
In Chatham, Ont., Jordan Sinclair has her head in the cloud and her feet on the ground, helping farmers make measuring carbon levels in soil less labour-intensive and more profitable. She, too, knows that soil — and ensuring farmers are getting more out of it — will be key to addressing Canada’s challenge of reducing greenhouse gas emissions.
And Rob Stone has a growing problem. In the past 18 months, the cost of fertilizer inputs rose by as much as 300 per cent. He knows that in a world where the demand for — and cost of — food is at its highest, he’ll need to use fertilizer more efficiently to get more out of his 9,000 acre farm in Davidson, Sask. If he isn’t using the right source of fertilizer, applying it at the right rates and putting the fertilizer down at the right time and in the right location, he’ll add costs to his business and emissions to his operations.
Canada is a global powerhouse in agriculture. We supply $75-billion worth of food to global markets every year. We’re a top supplier of key crops such as wheat and canola and a global leader exporting beef. We have an enviable stock of arable land and fresh water, a stable regulatory environment and international standing as a reliable supplier of safe, high-quality food.
Our agricultural sector was critical to building the volume, scale and productivity of Canada’s food system, delivering enormous benefits over the last half-century. But that system depends on cheap inputs, geopolitical stability and a productive, predictable natural environment.
The last year has been anything but cheap, stable or predictable — and the safe bet is that expensive, volatile and unpredictable is now the new normal. The price of food has risen aggressively, putting enormous pressure on Canadians and farmers alike. As war roils the Ukraine, a key global breadbasket is suddenly bare, making Canada’s Prairies more essential than ever. Floods, wildfires and extreme weather events are making growing seasons harder to navigate for our farmers, all while they continue to manage industry-wide challenges, such as rising emissions, lower productivity, labour and skills shortages and tight profit margins.
As difficult as these times are, though, new research from the Royal Bank of Canada, BCG’s Centre for Canada’s Future and Arrell Food Institute shows that Canada is on the cusp of a new green revolution where agriculture will be the hub. If we get it right, it’ll lead to an explosion of innovation, productivity, global leadership and environmental stewardship.
The moment we are in is reminiscent of the great Wheat Boom of 1880–1910, when Canada capitalized on a once-in-a-generation opportunity to increase wheat production and exports, and drive growth across the entirety of the economy.
Building an agricultural sector fit for an age of climate disruption, though, means looking to our farming future. Very quickly, farmers are seeing their skillsets change, enhanced or reshaped entirely. Herbert, for example, is also a Chartered Professional Accountant (CPA) and on the board of a venture capital organization that supports four different ventures. Sinclair, by trade, is a data scientist. A generation of people like them will need financial aid and upskilling resources to guide the transition, as well as networks and community building supports to bring more people into food production.
We also need to support farmers with technologies and tools to address critical emissions challenges by reducing fertilizer use, improving soil quality and scaling industrial solutions like carbon capture, usage and storage (CCUS). Connecting the dots, capital will be key. Last fall, RBC estimated that $2 trillion in public, private and Indigenous capital would be needed to get Canada to net zero by 2050. For agriculture, this capital must be directed towards changing how we grow things, rethinking livestock production, electrifying farm equipment and implementing new, but old, technologies like regenerative agriculture.
These changes must be balanced with helping farmers manage the risk and uncertainty of the transition. A national standard for measuring carbon levels in soils, for example, can reward farmers for reducing and storing emissions. Farmers alone mustn’t also have to bear the burden of risk when it comes to things like crop losses.
None of this will move the needle on growth, productivity or emissions if policy isn’t right. During the Wheat Boom, policy transformed the Prairies into a global breadbasket, driving settlement, immigration investments in key natural resources and safeguarding against global competition.
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Now, policy will be just as critical and our track record on policies to drive emissions reductions is spotty at best. Canada needs a specific strategy that is both national and global in ambition, yet also flexible enough to address a uniquely diverse set of regional priorities. We can also lead in creating an emissions reduction standard that will reduce friction among trade partners. Policy will also be the backbone of major priorities like infrastructure so that if we are to grow 25 per cent more wheat, for example, we can get it to Japan or Texas in the most emission-efficient way possible.
This is Canada’s moonshot. The world’s population is going to rise by as much as 26 per cent by 2050 to 9.7 billion. Climate change is already taking its toll, and scientists observe that today, our food systems are 21 per cent less productive than they otherwise would have been if climate change hadn’t occurred. Other countries, such as Singapore, Israel and the Netherlands, are already embracing this challenge and, if we continue on this incongruent path, we will miss our opportunity to lead in the world in ensuring agriculture is both an engine of economic opportunity and key in the fight against climate change.
John Stackhouse is senior vice-president in the Office of the CEO at Royal Bank of Canada, leading the organization’s research and thought leadership on economic, technological and social change. Evan Fraser is director of the Arrell Food Institute at the University of Guelph. Keith Halliday is the director of BCG’s Centre for Canada’s Future.
