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Pushing agriculture into economic primetime


[Music] Mind Your Farm Business
on realagriculture.com is brought to you
by RBC Royal Bank. Welcome to the Mind Your
Farm Business Podcast brought to you by
RBC Royal Bank. I’m Shaun Haney founder
of realagriculture.com and the host of RealAg Radio on Rural Radio 147 on SiriusXM. You can find more
episodes of this podcast by going to
MindYourFarmBusiness.com. Many times we talk about
the on the ground issues that make a real
difference on your farm. But there’s also some
really big issues that float at a
hundred thousand feet that impact all of us. Issues like access
to labour, trade, and technology touch all of us. These are all topics that
get thrown around a lot, but they seem so far
away from the farm gate on any given day. But their impacts can be felt
all the time on the farm. The question is,
is this industry and our political leaders
doing everything required to allow agriculture to
seize the opportunities that we all chat about
on Real Agriculture or around your kitchen table? Today’s guest for the Mind
Your Farm Business Podcast is John Stackhouse. He’s a senior VP
at RBC Royal bank. He has written a
comprehensive report on how agriculture is
intending to launch towards its potential, and how it’s dealing with
some of its restraints. Hey John how are
you doing today? I’m well thanks, how are you? I’m doing fantastic. I’m looking forward
to this discussion, you know. Agriculture is obviously
very, very important to the Real Agriculture audience as well as the overall
Canadian economy. And recently you put out
this report providing some analysis on what
really has to happen if Canada is going to
grasp the opportunity of agriculture going forward. And one of the things that
you mentioned in the report is about agriculture being
a strategic priority. Did you feel that
agriculture right now is a strategic
priority for Canada? When you look at Canada’s debate about
economic drivers and what we should
be investing in, or leveraging, or
taking advantage of to position ourselves
in the 21st Century. In our view there’s not enough attention on agriculture. We’re not the first
to point this out. Dominic Barton and his report for the Economic Growth Council, for the Trudeau government, stressed the crying
need and opportunity to invest more in agriculture and agriculture for
the 21st Century. But when we sort of
look across the country and listen to the discussions about the policies
and the priorities, we do have a concern
that agriculture is not up there at the
top or near the top where it should be. So why is it not? That’s, you know, we’ve
had an election campaign, the election cycle has
started here in Canada. And, you know,
agriculture once again, not exactly at the top
of the speaking point sheet for really any
of the candidates, why? Why is it not a priority
because if you were to ask economists, or politicians,
people in industry, they would all say that agriculture is so
critical to the economy yet it’s not being a
strategic priority, why is it that way? Yeah, it’s a great
question Shaun. I think a lot of it
is just out of sight, out of mind. And with that, a
lack of familiarity, a lack of proximity for most
Canadians to the sector, even though it’s very proximate, it’s on our tables,
morning, noon and night. But we don’t have the
same attachment. You know, when you think of
some of like the auto sector, which is usually important. I’m not trying to diminish that, but it’s concerning as
well as intriguing that, you know, when the auto
sector goes through troubles, it gets a lot of
political attention. And the same may not be
true for agriculture. Both are priorities. We calculated in our study
that if we can really enhance what we do in agriculture
with the right skills and the right investment
and technology, the sector can be
bigger than auto and aeronautics put together. This is a huge, huge economic opportunity
for the country. But I think that
lack of proximity is one issue and then a
lack of an appreciation. And we hope our research
helps with this, or helps change this. A lack of appreciation
of the opportunity. When we think about how
we’re gonna pay for health care in the 2030’s, we’re gonna have to be
producing more food and selling that
food to the world. When we think about
what we’re gonna trade with Asia in the
2020s and 2030s, yeah we talk about oil and
gas and those are really important elements of
our trade strategy, but agriculture is critical
to our trade strategy. Now, you did mention, you
just mentioned trade, and of course trade is
really top of mind for farmers around the
world right now. Trade being, in
agricultural good being very much used as a
chess piece in a lot of the trade negotiations that
are currently going on. Canada’s share of
agricultural exports globally has been declining. Have we become too
reliant on trade? Or is the issue that we’re, we started to take
agricultural trade for granted and we’re not
pushing hard enough for it? How do you, how does that…? Yeah, I’d suggest the latter. We need to trade more and we
need to be more ambitious with our trading
strategy especially for agriculture products. And we often as a
country think about, you know, the tech
products that we should be exporting to the world. Fantastic, we should. But there’s a lot
of value added, and a lot of sophistication
that goes into the agriculture products
that we develop, that we grow, that we produce and then sell to the world. And more focus needs to, more focus needs to be on that. We’re not naïve. The world of trade
has become rough, rougher and tumbler. And that probably ain’t
gonna change anytime soon, but we shouldn’t
shy away from it. Canadians don’t, you know,
we like to think ourselves as people who go into the
corner for the puck in hockey, and we should do the
same for trade. We think that the demand
for food in the 2020s is gonna be so significant
that kind of mathematics will dictate that the
world is going to need more Canadian food. As incomes grow in different
parts of the world, the demand for
high quality food, and Canada is one of
the few producers and exporters of that,
is also going to grow. So history is on our side here. Even though, you know,
we do have these serious challenges in the
immediate term. History is on our side
to be a significant, sophisticated food
producer for the world. We also think there’s
a really interesting technology opportunity
for Canada to invest in things like blockchain
which is going on in all sorts of parts
of the country. It’s really cool to see this. And I wish more Canadians
kind of knew about the tech sophistication
in the ag sector. That sort of technology we
think will help overcome some of the trade spots
that we get dragged into, which are based
often on political and qualitative assessments. Technology is one way
of diminishing that, diminishing that threat. Now is Canada investing
enough in technology in the agricultural space in
comparison to some of our biggest competitors
like the Black Sea, or South America, or
even the United States? No, no. We think this is a really
interesting challenge and opportunity for the country. There is some terrific
work going on and really valuable investments in pretty much every
part of the country. But it’s just not enough. We’re not scaling it. If you look at the
protein industry, super cluster in Saskatoon. That’s a really
good advancement. A lot of the work going
on in Guelph is terrific. Seafood, R&D, rocky culture R&D that we studied in Halifax
is really impressive but we have to scale this and
know that we’re up against, yeah, the US which
is a leader in this. Israel, and China are getting
fantastic at this as well. And it’s not just public
sector investment, although that’s important. We’ve got, you know,
as the report says, six of the hundred top
ag and food schools in the world are here in Canada. That’s amazing for a
country of our size. And we have to keep in our view, investing in R&D through
those institutions as well as through
private institutions. But we also need to find
was to encourage more commercial R&D to get
the private sector, the food producers
of the country to be investing more in R& D, developing the IP that will
allow them to lead the world. Is there criticisms of Canada
from the commercial side, from private industry in
terms of their ability to justify the investment
in technology in Canada? Is the ROI there
comparatively speaking? That’s a great question. And if we’re honest with
ourselves we have to accept that our investment environment is not as conducive
or inviting as it is in a lot of countries that we’re competing against, the United States
first and foremost. If you’re to buy a
sophisticated piece of farm machinery, or food
processing technology, often the tax
considerations are more advantageous in the US, the availability of
capital may be greater, especially venture
capital in the US. And it’s not good enough
for us to be kind of neck and neck with the US, or matching what they do. We have to outdo them. We have to be the place
that people are lining up to make their investments in. Yeah, we look at our population, you know, with 35, 36 million. Does our population
work against us? We’re relatively
a small country. There are cities, or I
guess I should say there are states with a lot
more people than Canada. Does that work against us
or is it some sort of an untapped advantage? I, you know, I guess
intellectually we could discuss it
as an advantage. But it’s a real challenge. And in fact there are
cities sort of emerging that will be bigger
in numbers than us, so we need to continue to
recruit and attract people from around the world for all
parts of the Canadian economy and all regions of the country. But agriculture we think
is a really interesting opportunity for Canada
to just kind of up our recruitment game to get the
best and the brightest in all sorts of walks of life
in food and food production. But also to attract and continue to attract
food producers who will come with the
investment capital to start or expand
operations here. We’ve got the land and the
water that every country in the world dreams of. And not the people to
take advantage of that. So people at 37 million,
is a challenge. And, you know, given the
amount of space we have it’s actually one that we
should be able to take on reasonably well over
the next few decades. We’re gonna get right
back to my discussion with John Stackhouse
of RBC Royal Bank right after a word
from the sponsor. [Music] This episode of the Mind
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account manager near you. Okay, so let’s talk
about that recruitment. How do we recruit more people into the industry
of agriculture? We know it has fantastic
opportunities going forward. There probably are some stigmas that still hold us back from a recruitment standpoint, but how do we change
this narrative? Changing the narrative is,
I mean it sounds simple, and to some people maybe even
come across as frivolous, but it’s really important. And one of our
recommendations was for whoever forms the
next government in Ottawa to bring industry and
provinces together. Let’s figure out a way to
develop a new narrative around Canadian agriculture. We’re great as a country. We’re great as storytellers. Let’s, you know, bring our
great Canadian storytelling to the ag story of the 2020s. We need to do that
globally and nationally. Globally, there’s millions
of people engaged in sophisticated agriculture
around the world. Who may see Canada
as an opportunity. And they may want to
come from the US. They may come from
Israel, Russia, or Australia, or dozens
of other countries. We need to get that
narrative to them so that Canada is at
the top of their list of places they would
consider moving and starting new business
or joining successful farm operations and food
production operations here. Nationally, it’s a really
interesting challenge to try to convince younger
Canadians of the enormous opportunities – economic
but also lifestyle in pursuing a farm, or
a food related career. You’re well familiar
with the numbers, but it’s pretty sobering
when look at the number of farmers due to retire
over the next five years, it’s a crisis. And then lay that up against
the fact that fewer, 20 some things than
ever this year are going into farming. And the number will
be fewer next year. That’s a real, real challenge. So how do we convince
18-year-olds, although some say you
got to start younger, with the eight-year-olds
of the country, whatever the age that
we’re targeting, how do we convince them that
you can pursue the most, you can pursue the
most digitally sophisticated career in the
world through farming. You can be relevant to
the future of the planet through farming. This is what so many
young people want today. You don’t need to
go work for Amazon to be at the cutting
edge of technology. You can do that
working on a farm or living in any
number of communities. You don’t have to
be a food producer. You can work with food producers and apply your digital skills
in all sorts of new ways. And we think this
narrative also needs to excite the country
about the imperative. It’s a moral imperative
to help see the world. There’s gonna be a
billion more people on the planet pretty soon. And we’re gonna have to,
I think the number is produce is much food
in the next 40 years than produced in the
history of this planet. We can’t do that just by
doing more of the same. So how do we get the great
innovators and creative entrepreneurial minds
of the country to say, this can be our moon shot. Let’s, you know, let’s
join the moon shot that Canada wants to
launch for agriculture to help feed the world
in the 2020s and 2030s. Do you think, you know,
so far we’ve talked about technology and attracting
people to work in agriculture. Do you think one of
the stigmas here is, is that we’re asking
for two things that conflict with each other? In a sense we’re saying, you know, we need
more implementation of technology on the farm. Some people jump to like
autonomous tractors. And of course we already have
things like robotic milkers. So why would I become a
worker in primary agriculture if I’m due to be
possibly replaced by robotics in the
next coming decade? Do you think that hurts at all? It’s a fair question. We’ve done a very
broad research report called Humans Wanted, which
we published last year. And our agriculture report
Farmers 4.0 was a direct follow on to that because we
wanted to start to look at specific sectors starting
with agriculture because it’s so important
to the country. But in Humans Wanted, you know, we amassed a database
of two million jobs in the country and developed
our own algorithms to understand the skills
that were in demand and discovered that what
we’ve seen over 300 years of tech revolutions
is happening again. The technology always leads
to more jobs, not less. It just leads to different jobs. And we’re seeing this
play out in curious ways in the agriculture sector. So you mentioned
robotic milkers. Clearly that’s gonna displace the old fashioned milker. Not many of those
around anymore, but it’s creating new demand for data analysts on the farm. And sometimes there
are data analysts who will work with a series
of farmers as a consultant. You’re not going to be a direct, live-on-the-farm, farm hand. So I take that as an
example of the new sorts of jobs that are emerging
and could attract people who maybe don’t want to literally get their hands dirty or don’t want to work
directly on a farm but would be
interested in applying their tech savviness
to agriculture. In your opinion does the
Canadian immigration policies that we currently have, do they align with the
needs of agriculture, recruit some people to
be working on the farm? They align with the
pressure points of today. One of our concerns is
that we’re not thinking enough about what
the pressure points will be a decade from now. So right now our
immigration approach to agriculture is largely
seasonal workers. That’s critical. And we have a reasonably
successful program. In fact it’s very successful on a number of
sectors and regions. And that will continue
for a number of years. But it may not continue forever because of the automation
that we’re seeing in different sectors or sub
-sectors of agriculture. Take greenhouses for instance. Greenhouses are an
area that are ripe, pardon the expression,
but ripe for automation. And we’re seeing that
all over the world. The Netherlands is
leading in this. The United States is
moving fairly quickly. We rely on a lot of seasonal
workers in our greenhouses. And there’s a risk that
over the longer term, let’s say over the decade, if we continue to rely on that, that rely on labour
more than capital, and rely on seasonal labour, which tends to be lower scale, lower paid, we’ll be at a
competitive disadvantage, a decade or two out
as our competitors invest in these
new technologies. It reminds me a bit
of what happened in the auto sector in the 1970s. We’ve got to be careful that we don’t fall
into the same trap, where we focus on labour
and not enough on capital. And particularly,
in agriculture, that we focus on seasonal
labour and don’t think about the enhanced skills that
those seasonal workers may need to develop over time to work with these
new technologies. Okay, so whether we’re talking
about somebody that is, you know, we call
labourer on the farm, in primary agriculture, or we’re talking about
the next plant breeder or maybe the next corporate
CEO in agriculture, we got to recruit these
people into the industry. Some of them are gonna come
from outside of Canada, and some of them are great
candidates domestically. What about the education system? You mentioned Canadian
universities previously, but let’s even take
it to high schools and elementary
schools in Canada. Are we talking enough
about the industry to students from
all backgrounds? No, not anywhere
close to enough. And it’s a great opportunity
if we can double down, or create a new narrative
and invest in it. We were impressed with some
of the guys from Australia where they teach agriculture, or use agriculture to help
teach kindergarten students and stick with it
through high school. And you’re not teaching
kindergarten kids or primary school kids how
to farm although maybe you do teach them
how to grow things. But you use agriculture
as a way of teaching all sorts of things
including digital skills, including software skills. And as we’re teaching kids, let’s say, to code,
let’s ensure that we are using enough case
studies and illustrations and narratives to say, you know, if you’re
learning a code, it’s not just so that you can
go develop software for, you know, one of
the global giants. That may be a good
career for you, but you may develop
software to create the farm of the future that’s going
to help feed the planet. And, you know, if that’s how we’re
teaching 12 -year -olds, we think that’s
inspiring and engaging, and would be smart for
Canada strategically. So my assumption would
be that in the US they’re having the
same discussion. In Australia they’re having
the same discussion. In the UK they’re having
the same discussion. Is really the question though, which one of those countries, and other ones that
are in the same boat, which one of the countries
or group of countries actually does
something about it? Yeah. I wouldn’t assume that
all the countries you mentioned are
having this discussion. We also have to be mindful that many of our kind
of peer countries, I’m thinking of the
Netherlands or Israel, are small enough to
move very quickly. And when they innovate
they often do so very quickly because of
their small population size relative to the superpowers but also their small geography. We have a relatively
small population and we need to use
that to our advantage. We’re small enough
to get things done. Yes we’re big geographically but that’s also an advantage. So how do we work
together as kind of a tightknit community
of 38 million people with a massive expanse
of land and water? Those are twin advantages. But we also have to be
mindful and remind ourselves that a lot of other
countries are moving very quickly, moving
aggressively. It’s really impressive
to see what’s going on in the US across the farm belt, but also in states
like California. It’s impossible to see
what Australia is doing. And we’re really
good at agriculture, like, you know, top tier
in the world, absolutely. But we could easily slide. So we need to remind ourselves that others are moving quickly. We need to learn from them, study from them and, you know, if needed
bring those ideas here but also make sure we’re
out there competing with them for every
market that we can. Yeah. Hey John this has been a
fantastic conversation. Thank you so much for joining us here on the Mind Your
Farm Business Podcast. Shaun I really appreciate
your interest. Thanks, thanks for having us. Some great comments from
John Stackhouse today. I found it very
interesting to hear and talk about our need
to diversify trade flows, invest in technology
while needing to recruit the brightest and
smartest people into the industry at all levels. No small challenges at all. But I know one thing,
agriculture is resilient. It has big goals and it
can meet the challenges that are laid in its path. I hope that you enjoyed
today’s discussion. If you have any feedback
please email me at [email protected] or call the Real Ag listener
line at 855-776- 6147. I would love to hear
what you thought about today’s discussion. Did we miss anything? Do you have some thoughts? I’d love to hear your opinion on this or any
topic discussed on the Mind Your Farm
Business Podcast. You can find more episodes
of Mind Your Farm Business by going to
mindyourfarmbusiness.com. Thanks to RBC Royal bank. And until next time, keep on minding
your farm business.

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