Canadian farmers lack infrastructure

Wednesday, March 11, 2009

© AgMedia Inc

by BETTER FARMING STAFF

LONDON - Competition in low-cost grain and oilseed markets could become a lot tougher in coming years. To compete, growers need to hone their management skills and persuade governments to support the development of infrastructure needed to access profitable niche markets for bio products, say two speakers at this year’s Ontario corn, soybean, wheat and coloured bean conference.

Southern Manitoba agronomist and writer Les Kletke, who worked in Russia in the 1990s, says recent agricultural developments in Russia and China make it tough for Canadian farmers to compete in global commodity markets. 

Kletke, who returned to Russia in 2005 and on the same trip travelled to China, says the Russia’s farmers, who he considered only a few years earlier to be woefully out of date, have caught up to North American practices.

In turn, the country’s yields per acre are rising but cost of production remains low, he says.

In China, small farms averaging half an acre and the low cost of labour – 16 cents an hour is the average factory wage – mean cost of production is low in that country too. “Their capital costs are way down,” he says, noting everything can be done by hand when farming on such a small scale.

For Canadian farmers to compete they need to know their costs of production and base their marketing decisions on those. And they need to decide whether it’s more profitable to compete in higher-end niche markets or in the production of low-cost products.

Dr. Gord Surgeoner, president of Ontario Agri-Food Technologies, a non-profit organization that promotes biotechnologies, also downplays commodity market opportunities and quips “if we’re going to be in the lowest-cost production (market), might as well move to somewhere like Brazil.”

He says niche markets present opportunity for Canadian growers, but Canadian growers need infrastructure.

He says for example there is a “massive” potential demand for biomass in power generation, but crops need to be pelletized for use. “That’s probably one of the greatest things we need for the next generation of agriculture is conversion plants” to process crops, he says.

Surgeoner recommends that farmers ask governments to help finance the infrastructure.

“If we don’t have infrastructure, we’re going to have to export the product out, have somebody convert it for us and we’ll import it back in.”  BF