As Clem Samson looks forward, he sees a lot of reasons to be optimistic.
Samson, Vice President of Western Operations at Farm Credit Canada (FCC), attended AFA’s Annual General Meeting in January 2015 and shared what his organization sees as key global and domestic economic trends poised to impact agriculture in the next five to 10 years.
“One of the big things we see is an increasing prosperity in the middle class, especially for people in under-developed countries,” Samson says. “Studies show that when people begin to make more money, the extra income goes into buying more high-quality food and proteins. That’s good news for agricultural producers.”
Samson says FCC is keeping an eye on several global and domestic trends that will impact Canadian agriculture. Here’s an overview of what he sees.
Global Economic Trends
- it is expected that about 60% more food will be required to feed the world by 2050
- it’s estimated that between 2013 and 2020, the global middle class will double from 2 billion to 4 billion people
- increasing prosperity in the middle class in Asia will see diets starting to mirror diets in the West
- a November 2014 Conference Board of Canada World Ranking Food Safety Performance report indicated that Canada is #1 in global food safety performance
- the U.S. continues to be our largest trading partner, and represents 52% of our agriculture and agri-food exports, about $28 billion of agricultural goods ($9.2 billion primary, $18.9 billion food manufacturing)
- China has become Canada’s second-largest agricultural market
- pork is a significant need for China, and it’s expected that China will import over 400 million metric tons over the next 10 years
- once the Comprehensive Economic Trade Agreement (CETA) is implemented, 95% of European Union and Canadian agricultural tariffs will be eliminated
- by 2028, according to the United Nations, India is projected to overtake China in terms of population, surpassing 1.45 billion people. India is already a strong importer of Canadian pea, lentil and chickpea crops
Domestic Economic Trends
- appreciation of farmland values will continue, but could slow a little
- farm wages have increased an average of more than 3% per year over the last 10 years
- by 2020, it’s estimated that Canada will have more than 2 million new immigrants, representing about $27 billion in additional food purchased in Canada over the next five years
- the millennial generation (born 1980 – 2000) is having a growing impact on food and how it is produced
- value-added food products will present new opportunities for Canadian producers
To Samson, all these opportunities and signs of continued growth mean a bright future for agriculture. He encouraged the participants at AFA’s AGM – and all western producers – to do a good job of sharing what they do.
“We have so much to be proud of,” he says. “But, we need to get out there and tell our story. Let’s share what a great industry agriculture is.”
Farm Credit Canada provides financing and other services to more than 100,000 primary producers, value-added operators, suppliers and processors along the agriculture value chain. For more information on Farm Credit Canada, visit the FCC website: https://www.fcc-fac.ca/en.html.