Grainswest - Fall 2024

Fall 2024 grainswest.com 33 A HISTORY OF BIG GAINS Simply put, agricultural productivity is the measure of goods and services produced relative to investments such as equipment, inputs and labour. According to FCC, between 1970 and 2020, the number of farms in Canada declined by half, average farm size doubled, value per acre nearly quadrupled and a farmer now produces twice as much with the same level of investment. This has been achieved with the adoption of new crop varieties, labour-saving technology and the use of big data in agronomic decision-making. Nonetheless, agricultural productivity growth has stalled. One hypothesis is that the biggest, easiest gains were made long ago; the industry has picked the low-hanging fruit. “Producers have already adopted most of the technology that came in the ’90s and 2000s, such as low-till farming,” said Isaac Kwarteng, FCC senior economist. “The results have been impressive, so now the potential of growing productivity is limited.” Productivity growth has also slowed due to a decline in investment in technology, he said. “When investment slows down, we don’t know where the next productivity drive is going to come from.” It is possible to rekindle growth, said Kwarteng. Yield improvement could be achieved through the adoption of GPS-driven precision equipment, advanced seed varieties, improved irrigation technology and enhanced nutrient management practices such as the 4Rs. Mechanization and automation may also improve labour challenges. Many farmers have adopted such technologies and management practices, yet others have not. According to a 2023 McKinsey & Company survey, European and North American farmers lead global ag-tech adoption. About 61 per cent of North American farmers now use or plan to use a new product in the next two years. Those surveyed also cited high costs (52 per cent) and unclear ROI (40 per cent) as barriers to adoption. While lack of adoption has slowed productivity growth, so has lack of investment in research and development of new technology. Kwarteng said government should remedy this through the creation of public–private partnerships. Innovation in production practices can enhance resilience to climate change, expand food supply and boost the ratio of farm product prices to input costs paid by farmers, he added. The aforementioned $30 billion annual boost to the nation’s farm economy is a tantalizing potential reward. “I think it is realistic, but challenging,” said Kwarteng. “We are optimistic that with the right investment in capital and technology, and with the adoption of modern farming practices aimed at enhancing efficiency, we should be able to realize these gains.” The CAPI report, entitled Agri-Food Productivity and Trade: Policy Gaps and Possibilities , predicts a hungrier, hotter world full of geopolitical tensions where agricultural productivity