Neil Mitchell, Insurtech Co-founder, Investor and Advisor, Offers a Take on the Issues Facing Canadian Agriculture
The idea that Canada may face significant food security issues seems counterintuitive. As the second largest nation in the world, with limitless horizons of fertile land and a wealth of fresh water, Canada is blessed with an obvious abundance of everything needed to produce food, feed its people, as well as populations around the world.
And yet, it’s also obvious that Canada has not met its potential in this regard. There are myriad reasons for this, and a limitless supply of experts who readily point fingers in many directions to explain why Canadian agriculture is falling short of its promise.
“A range of macro and micro variables are limiting growth in the agricultural sector and putting our long-term food security at risk, not the least of which is limited vision and incentives for sustainable investment on the part of Canada’s federal government,” says insurtech co-founder, investor and advisor Neil Mitchell.
Mitchell’s experience in the insurance and insurtech industry is just one of the reasons he is interested in the topic. As an experienced insurance professional and insurtech entrepreneur, he has closely followed the trends in severe weather, flooding and the overall environment which have led to extensive damage to property, communities and businesses.
“A changing climate is adding new magnitudes of volatility and unpredictability to yields in many countries,” he contends. “In those countries droughts are becoming more common, as are periods of heavy wind and rain. At the same time a changing climate presents Canada with a unique opportunity to expand and establish itself as a global agriculture superpower.”
Mitchell notes that the federal government has not been focused on agriculture, and has been slow to ensure that Canada’s agriculture sector is climate-change ready to feed Canadians and to share its bounty with the rest of the world.
In particular, Canada’s federal government has been slow to create investment in leading technologies in the agricultural sector, and to make it affordable for farmers to benefit from digital systems that can streamline operations, lower costs and promote greater efficiencies. Policymakers and educational institutions have lagged in creating initiatives that will encourage young people to consider careers in agriculture. In Canada, farmers are getting older, and children in farm families often leave their communities for new opportunities.
Market distortions have led to a situation where many essential fruits and vegetables are imported. “When supply chains are disrupted, as has happened during the COVID pandemic, there isn’t enough flexibility or capacity in the system to fill shelves and refrigerators,” Mitchell explains. Despite Canada’s inheritance of rich soil, ideal growing seasons and ample water supplies, the country is a net importer of produce, he notes. A North American carrot or cucumber is just as likely to have been grown in Mexico or the U.S. as to have been harvested in Canada.
Dave Dinesen, CEO of CubicFarms, which specializes in automated technology for indoor farming operations, agrees with this sentiment. Last year he told The Globe and Mail: “Picture a head of lettuce from California on a shelf in Toronto. It probably travelled more than 4,000 kilometers, and by the time it reaches a customer’s fridge, it will be rotten in a few short days. Studies have shown that up to 40 per cent of food is lost on the journey from farm to fork. Indeed, food is the single largest wasted item in the country, making up 28 percent of all garbage that ends up in municipal landfills.”
Both experts advocate a greater reliance on technology to boost output, enhance Canadian food security, and bring the farms that grow the crops closer to the people who consume them. Farmers haven’t been slow to embrace technology, notes Dinesen: “I’ve found farmers [to be] keen adopters,” he told the newspaper. “Canadian farmers were using robots to milk cows before most people had desktop computers.”
“The ongoing technological revolution is critical to building a strong Canadian agriculture sector,” adds Mitchell. “That carbon-based revolution gave us an immense range of modern conveniences, created generational wealth, lifted populations out of poverty and improved the quality of life for people worldwide. Yet in one of the great ironies of climate change, Canada is likely to harvest more crops even as much of the world endures drought, reduction in arable acreage, degradation of soil quality and famine. Some models predict that Canada’s growing season will lengthen, and warmer temperatures will make planting of newer varieties possible.’
An added twist is that Canadian agriculture may contribute, in part, to a climate change solution. This seems counterintuitive to many people, but as Financial Times editor-in-chief Kevin Carmichael noted in a report on the promise of Canadian agriculture, “The effort [to increase yields] might be anchored on the goal of neutralizing carbon pollution. Agriculture is responsible for about 10 percent of global emissions, but Canada’s farmers and processors are greener than many of their peers, since they account for about eight per cent of Canadian emissions.
“If the connection to the environment isn’t obvious, consider what would happen if a trade war between China and the G7 powers led the former to purchase all its grain from Brazil, a country that has had little difficulty razing the Amazon rainforest to make room for more farmland. Global commodity markets stuffed with Canadian cereals are good for the environment.”
“Clearly Canada has a very unique opportunity to establish itself as an agriculture global superpower. In a time of changing climate, mass migration and population growth, leadership and collaboration between Canada’s public and private sectors is necessary and critical for Canada to achieve its place as an agricultural superpower. Time will tell whether in fact Canada has the willpower to effect the changes required to feed Canadians and the world,” concludes Mitchell.
This is a guest post from Day to Day Finance.