Agricultural exports -
holding their own
Canada helps feed the world. That's a frequently made statement
that our agri-food sector is justifiably proud of.
And the proof is in the numbers. According to statistics
from Agriculture and Agri-Food Canada (AAFC), 35 billion dollars of Canadian
agricultural products went to almost 200 countries in 2009. Although that's a
slight drop from the $38 billion we recorded in 2008, the value of Canada's total
merchandise exports declined much more drastically.
Total exports dropped 25.5 percent while agricultural
exports only dropped 8 percent from 2008 to 2009. In comparison, the value of
automotive product exports dropped almost $20 billion during that time. This overall shift in exports means agri-food
has increased its share of total Canadian exports to almost 10 percent.
With statistics like these, it's only natural for Canada to
be seen by many as a global agricultural powerhouse and a major global food
provider. Our top export products in 2009 included wheat, canola, pork,
potatoes and beef. And our top five
international markets were United States, Japan, China, the European Union and
Mexico, according to AAFC.
In many of our largest commodities, exports account for the bulk
of the market. This is true with canola, where exports account for 75 percent
of Canada's total annual production, and also with beef and pork, where
approximately half of Canada's production is exported.
According to a consultant with Synthesis Agri-Food Network,
this means that the value of agri-food export markets to the Canadian economy
is considerable - and any interruptions in market access can have significant
repercussions for Canada's entire economy.
"Agricultural export
markets are crucial for the Canadian economy - and for some agri-food sectors,
we are export-dependent," says Mary Lou McCutcheon, who specializes in trade
and trade-related issues. "But we need to look at the diversity of our entire
agri-food industry when we're looking at our agri-food and trade policies."
Exports are not a focus for all commodities. The supply managed dairy and poultry sectors,
for example, have a domestic market focus. Others, like the sheep and lamb
industry, have production levels that do not even satisfy domestic demand for
their product - less than half of the lamb consumed in Canada is actually of Canadian
origin.
But for many of Canada's agricultural products, domestic
markets do not have the potential to grow significantly, which is why we depend
strongly on export markets in order to maintain or grow those commodities.
Another important point to consider when looking at Canada's
agri-food export markets is that they are always shifting and changing. In the
short term, these changes are related to trade issues that arise, such as the low
level presence of GM flax that halted Canada's flax exports to Europe, or the restrictions
on pork imports in the early days of H1N1.
From a longer term perspective, the changes are related to
product evolution and new product development. As a country becomes more
affluent, the dietary demands of its consumers also evolve. This can either
mean more opportunities for higher quality or value-added products - or it can
mean a decrease in export opportunities if a particular country has decided to
start building up its domestic production in that area.
"A reduction in one
area may mean an increase and a new opportunity in another so we need to be
proactive in preparing for changing opportunities with our global customers,"
says McCutcheon.
Insights - What
should we be considering when it comes to export markets?
Agricultural exports are crucial to the Canadian
economy - Many of our agricultural commodity sectors have developed and
expanded to meet the needs of export markets. They rely on those markets to provide growth opportunities for farmers,
agri-business and those indirectly connected to the industry.
Diversity requires policy balance -
Canadian
agriculture is very diverse and our trade and food policies need to take that
into account. Each export product is different and since trade is not a focus
for some of Canada's agri-food sectors, the one-size-fits all approach won't be
successful in the long run. We need to
balance the needs of export customers with the needs of Canadian farmers.
Changing markets need new products - Many export markets like China, Mexico and India are
evolving economies or emerging markets. Their affluence is increasing and their
infrastructure is growing, which means the types of products consumers will
demand in the future will change as well. This could provide opportunity for
Canada to produce and export new products, or to develop high quality niches
that provide specific product attributes or advantages, such as full
traceability, added health benefits, or specialty traits suitable for the
bio-products market.
Please note:
Synthesis Agri-Food Insights e-newsletter will be taking a break over the next
couple of months and will return to your inbox in September.
Have a fantastic summer!
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