Agriculture and Agri-food in Canada
The agriculture and agri-food sector generated 6.8% ($134.9 billion) of Canada’s GDP in 2021, and employed 2.1 million people in 2021, making up 1 of 9 jobs in Canada. Included in this are several industries, ranging from primary agriculture to processors and wholesalers. As a major employer and significant contributor to the national GDP, agriculture and agri-food is a critical component of the Canadian economy. However, while industry demands have grown, total farm area decreased by 3.2% and the total number of farms decreased by 1.9% between 2016 and 2021.
Canada’s Economic Strategy Tables set out goals to secure Canada’s place as one of the top five global competitors in the agri-food sector by 2025. As part of this, targets were set at $140 billion in domestic sales and $85 billion in exports by the same year. Barriers to achieving advancement included regulatory barriers inhibiting innovation, lagging investment, tight labour markets, trade barriers, and infrastructure bottlenecks (e.g., broadband limitations).
Despite the importance of agriculture and agri-food within both the labour economy and in the domestic and global food supply chain, the sector has faced major challenges as a result of the pandemic, including labour shortages, supply chain delays, food insecurity, and facility closures, all of which have continued to impact the country. Additionally, as agriculture is heavily dependent on climate, increasingly volatile weather patterns are having major effects on the sector. Rising mean temperatures, extreme weather events, unpredictable rainfall patterns, and droughts have created frequent challenges with the potential to impact crop yield, livestock health, and transportation of goods. The global agricultural industry also accounts for over half of the world’s land and freshwater usage, while an estimated one third of global GHG emissions and 10% of Canada’s GHG emissions result from food and agriculture production.
In addressing increasingly pressing challenges faced within the agriculture and agri-food sector, technology is recognized as a critical component to building a more efficient, more sustainable, and more profitable industry.
The agricultural technology (agtech) industry has shown significant growth in recent years, with Canada recognized as one of the global leaders with a market value of $954 million in 2021, up from $617 million in 2016. Implementing sustainable and efficient technological solutions in the industry is becoming increasingly important to respond to prescient challenges within the agriculture and agri-food ecosystem. With the potential to automate labour, integrate smart systems, reduce the reliance of crop production on weather patterns, and reduce GHG emissions through the adoption of sustainable practices, agtech is key to increasing sector resiliency. Globally, Canada has the second most agtech investors after the United States, demonstrating a major interest in continued technology uptake.
In the past decade, the usage of land practice methods such as rotational grazing and planting winter cover crops has increased, as have the production of organic products and drought-tolerant crops. Furthermore, the number of farms using renewable energy has more than doubled since 2016, with 11.9% of farms reporting renewable energy usage in 2021. Of the 189,874 farms reported in the 2021 Census of Agriculture, almost a third implemented the usage of automated guidance steering systems, and adoption of GIS mapping increased by 58.6% over five years. However, in spite of these positive changes, there are still numerous opportunities to boost the adoption of innovative technologies including controlled environmental agriculture, precision agriculture, robotics and automation, and biotechnology.
According to the Information and Communications Technology Council (ICTC), among the hundreds of agtech companies operating in Canada, precision farming, controlled environment agriculture, crop protection, and biotechnology are major focuses in the current ecosystem. The majority of agtech companies (33%) are based in Ontario, with British Columbia (18%) and Alberta (17%) also having significant stakes in the sector.
While 61% of North American farmers currently using or planning to adopt an agricultural technology according to a recent McKinsey report, upfront costs, unclear ROI, and complex implementation are cited as major barriers to adoption, indicating a need for increased financial and regulatory supports for farms.
High-Growth Agtech Solutions
Precision agriculture employs the use of sensors and IoT to collect and use data to improve task efficiency and accuracy, while also integrating other technologies, including AI, GPS, robotics, and drones. Used for crop monitoring, weather monitoring, soil sampling, agricultural mapping, equipment management, and more, applications of precision agriculture range in size, with the ability to fine-tune specific processes or manage entire facilities. The market value of precision agriculture in Canada reached $870 million in 2021.
Precision agriculture systems are often used within controlled environmental agriculture, which allows for crop production outside of the constraints of weather patterns, seasonal limitations, and climate change through greenhouses and vertical farms.
Automation and robotics solutions have the potential to increase efficiency and safety, and reduce the effect of labour shortages through applications in crop harvesting, livestock handling, food processing, and more. However, there are still numerous challenges with automation, in terms of cost, implementation, access, and performance. Due to a number of factors, uptake of automation remains limited; for instance, only 8-11% of dairy farms in Canada use robotic milking systems, compared to 30% in Sweden in 2018.
In 2021, Canada used 11.6 million hectares to grow genetically engineered crops, including apples, wheat, flax, and potatoes. Agricultural biotechnology is used to develop crops with enhanced resiliency to weather conditions, pests, and disease, while limiting dependencies on water fertilizer and increasing crop diversity.
The cross-disciplinary nature of agtech provides an opportunity for Canadian innovators in a number of sectors to address challenges faced by agriculture and agri-food, and the adoption of new technologies and processes is a critical component to improving sustainability and resiliency in a growing and increasingly volatile industry.