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XXII - Deepening Engagement In Production

Updated: Jan 16

Our primary mission is to open new sales channels for producers to reach out to overseas markets, so that they can sell their crops directly to end-users, like they do across North America. We believe these new channels would help producers diversify to higher-value crops that yield higher-margins. This will also lessen our grain-sector’s dependence on bulk-trades, which face increasing competition in world-markets that we fear will further squeeze producer-margins in the future.

Direct-sales channels not only benefit our producers but also overseas buyers – millers, processors, and other end-users. They can procure specific crop varieties or grades generally not available through bulk-channels, improving the quality of their own products. They can get those crops delivered to their door-steps in containers, with product integrity intact, and as necessary, identity-preserved. While getting the specific crops they need, they may even realize cost savings from direct-deliveries.

Direct-channels are widely utilized across North America, not just domestic but also in cross-border trades: either producers reaching out for direct-sales opportunities, or corporate buyers actively procuring from multiple production sources. But these channels are not commonly used, if at all, in overseas export-trades, hindering producers’ ability to specialize and shift to higher-value crops, as well as buyers’ ability to procure what they need. As to the reasons, we must reflect on history.

Our grain-export system was built on a single-desk model, at a time when grain transport was much more cost-effective in bulk. With the dissolution of that system, both Canadian Wheat Board and wheat-pool assets were privatized. These were highly capital-intensive acquisitions; new owners found themselves heavily invested in fixed-assets (inland and coastal terminals) with a vested interest, if not a necessity to continue to utilize them, perpetuating the bulk-dependence of our grain-exports.

At that juncture global transportation supply-chains were rapidly containerizing, enabled by advances in intermodal-systems and their declining costs. Many of us also saw the containerization potential in grain-trades. While these trades were containerizing across Europe, and in time Asia, not much attention was paid to facilitate the same in North America. While containers were returning empty to Asia across the Pacific, pulling them inland to the Prairies for grain-trades proved difficult.

As we discussed in our earlier articles, this was not an insurmountable challenge, even back then, and now is even more feasible. There is enough empty capacity to increase containerized grain-exports by more than 10 MT now. The real challenge, however, is facilitating direct-sales channels to attract overseas buyers. To this end, our immediate priority is recasting our image in overseas markets: the world knows us for bulk-trades, not for our primary production sources, from which they can buy a huge variety of crops and get them shipped to their doorsteps in containers.

For this purpose, we developed a 6-prong framework to promote Prairie interests in overseas markets – to provide visibility into this highly advanced grain economy and thereby attract buyers to procure grains directly from production sources. Five of these promotional-prongs are aimed at extolling the virtues of the primary grain-production sector, at the core of which are advanced-farms, the focus of our farm-profile program. However, we must go beyond the virtues of individual-farms to other elements of the grain-ecosystem that support these primary production-units.

The “ecosystem” concept we introduced in our last article was to present a more holistic view of the grain economy, with a multitude of stakeholders we wanted to draw into our orbit to support our trade-facilitation mission. In this article, we focus on the primary-production chapter of that ecosystem to mobilize support from its constituents, four main stakeholder groups that we identified in our previous article:

  • Agronomy Departments: Primary production units rely heavily on the region’s research-capacity, be it in increasing their yields, improving crop-quality, or diversifying crop-mix. We want to promote this capacity through a series of case-studies prepared in cooperation with leading agronomy-departments.

  • Producer Associations: We are looking for support and participation from crop-commissions or producer-associations to prepare a series of crop-profiles (by type, grade, and variety) to demonstrate the region’s remarkably diverse crop-base – production and export volumes, historical trends, and future projections.

  • Government Agencies: Even with all the market and trade liberalization, grains remain part of the food-chain and subject to regulations from seeding to growing to handling to export. We are hoping to work with all public agencies involved to convey the quality-assurance virtues of our grain-chain, production to export.

  • Foundations-NPOs: As we face an imminent climate-crisis, sustainability is of great concern, with several NGOs paying close attention to the issue. To our credit, it appears that Prairie-agriculture has become a carbon-sink. We want to draw attention to this in extolling our grain-economy’s sustainability-record.

In this article we focus on these four elements, with the intention of returning to farm-profiles next to address the challenges we face in rolling out this program.

Agronomy Research Capacity

Farming-enterprises are the primary producers and our core constituency. We extol their virtues through farm-profiles and cast them as the primary source of grains importers can buy from. But farms do not operate alone in the primary-production sphere: they draw on the support of many other elements of the grain-ecosystem. As important as what happens in the fields is the support-systems behind the scenes; we give as much credence to these elements as farms in recasting our global image.

The general perception of farmers is as practitioners in the field, far removed from science-and-technology. They do uphold family-farming traditions, and tend to be cautious and conservative, but they closely follow advancements in science and technology. They keep a close eye on the latest seed-strains, fertilizer-varieties, new methods-and-practices, or other advances. Even if they hold back for a crop-year or two, they always come back to follow the successes of their neighbors.

In the US, the role of science-and-technology in agriculture was recognized by the Founding Fathers, gaining momentum in the first half of the 19th century, leading to the first agriculture-college in Michigan in 1855. Agricultural-and-mechanical (A&M) movement got a boost with the Morrill Land Grant Acts (1862 and 1890). Many prominent applied science-and-engineering faculties of today can trace their roots back to agricultural colleges, at least land-grants passed in the cause of A&Ms.

The roots of agriculture in our region’s universities go back to their early years, late 19th century in Manitoba and early 20th century in Saskatchewan and Alberta. In fact, University of Saskatchewan started as an agricultural college, but even in the other two, agriculture was among the founding or early colleges. In time, agronomy – loosely defined as science-and-technology of agriculture – became a core discipline in all post-secondary institutions across the region with applied research capacities.

Though US universities might have had a leg up in bringing A&M traditions into their curricula, our institutions were quick to catch up to the frontiers of knowledge in this domain; in fact, in many ways we are leading the world in applied research, be it in seed-breeding, adaptation to soil conditions, or advancing farming methods. Many farmers actively participate in applied research projects, or at least benefit indirectly from them through the seeds, fertilizers, pesticides, or chemicals they purchase.

The same way as our research-capacity is available to producers, it is accessible to those interested in procuring grains from our production-sources. They can consult with research-institutions for advice on where to find the type of crops they need, and if interested in entering advance-contracts, what regions to go to and what to look for in the way of seed-varieties and farming-methods to achieve the grade and quality standards they want – options not even relevant through bulk-channels.

The image we want to project to global audiences will carry the following messages, presenting the Prairies as a leading agricultural-region where farmers have access to the latest scientific knowledge, and work hand-in-hand with highly qualified experts.

Institutions: There are a dozen or more universities and colleges in the region, all with active agricultural research programs and labs at the service of the grain-economy. They have top-notch resources and are well funded through endowments and government agencies, provincial and federal. They are not only renowned academically but also actively engaged in hands-on applied research efforts in the fields – they have been instrumental in driving the advances in Prairie-farming.

Seed varieties: There were numerous contributions from the R&D sphere to Prairie agriculture, but probably the most significant were from the crop-genomics domain. Advances in seed-strains and their adaptation to local soil conditions contributed greatly to yield and quality improvements. Also, we saw significant benefits from drought-resistant seeds in the last crop-year; though it still turned out to be a poor harvest, it was nowhere near as bad as the last drought-year a decade earlier.

Growth conditions: Agronomists are also involved in field-operations by providing guidance to farmers with respect to crop-choices most suitable to varying soil conditions across the region, as well as best-practices in seeding, fertilizer-chemical applications, and harvesting-methods. The hugely successful effort in turning the region into a prime-source of pulses on the world stage was the result of close collaboration between agronomists, producers, and governments working together.

Sustainability: The scientific community is also active in furthering the cause of sustainable-agriculture, now with evidence that Prairie agriculture has turned into a carbon-sink, obviously a great feat in combating global-warming. The region is blessed with irrigation-free-farming, but with the help of the scientific community both resource-requirements and carbon-emissions are closely monitored to ensure that the sustainability-record is not just maintained but continuously improved.

The portal-section devoted to extolling our region’s cutting-edge research capacity in agronomy will be structured into three tabs under the above titles. The main tools we will use to put these strengths across are case-studies but we will also provide dedicated pages to give sponsors or stakeholders a chance to promote themselves.

Diversity of our Crop-Base

Our grain-economy has a very diverse crop-base, in fact one of the most diverse in the world. But overshadowed by the fact that most of our crops are exported in bulk (85% of grain-exports through the West Coast), and two staples, wheat and canola, account for 75% of export volumes, our crop-diversity remains a well-kept secret. The farm-profiles we intend to post may set this record straight, but not sufficiently, as they will not portray the full extent of our crop-varieties in the aggregate.

The first thing to recognize is that we always talk about what we export, but our production volumes are double that. If anybody cares to investigate the mix of what we produce, they will find much greater diversity. Naturally, we have the flexibility of producing more of what we consume domestically, thus export more of the same. But we cannot expect overseas buyers to discover this diversity on their own; the onus is on us to present profiles of what we are capable of producing and exporting.

Another problem is our reputation as an all-purpose wheat-exporter. The fact that this crop, which we have an excellent reputation for, represents half of our export volumes is not a problem in and of itself. There are many wheat varieties and grades we can (in fact do) produce, including ones discerning importers are willing to pay a premium for. But this kind differentiation does not seem to be in the interests of bulk-traders that are driven by volume; more of the same suits bulk-interests best.

Thus, we have a formidable task facing us in promoting our capacity to produce and export much greater variety and grades of crops, at least to increase our export prospects through direct-sales channels. In theory, the data for this purpose is available at the producer level, but not very practical to assemble. Instead, we hope to get the support of crop-commissions that possess the same data, as they are paid from the sales of their respective crops – wheat, barley, canola, pulses, etc.

This data also resides with the Canadian Grain Commission (CGC) but we hope to work with the grain-commissions for another reason. These are the creatures of the post-CWB era, funded through crop-sales, in fact producer-associations run by officials elected by their members, thus representative of their constituents. Thus, rather than CGC, it makes more sense for the crop-profiles we intend to assemble for export-promotion purposes to have the stamp of approval of producer-associations.