Processing potential long way from reality

Processing potential remains a distant reality in Canadian agriculture. Reports extolling the unrealized "potential" for more value-added processing often highlight jaw-dropping numbers, such as an additional $75 billion on top of the $188 billion the sector already generates. However, no mention is made of growing concerns over ultra-processed foods and their potential impact on future market growth.

The drive from potential to reality seems a long way off. While there have been significant developments in secondary processing, such as canola crushing, many investments have failed despite substantial public funding. The fundamental issue is that raw commodities are typically cheaper to transport than processed products, and Western Canada's long distance from markets makes it costly to transport processed goods.

Despite the sector's chronic labor shortage, Canada faces challenges in exporting most of its processed products. The National Food Security Strategy, which expands the scope of agriculture and food beyond economics to national security, brings new funds to the processing table. However, these funds lack cohesiveness and fail to address the gaps that hamper small processors' ability to scale up and compete globally.

Canada's food and beverage processing sector, which boasts 9,000 establishments, receives substantially less federal support than other manufacturing sectors relative to its contribution to GDP. Although the sector is Canada's largest manufacturing sector, it is also the biggest customer for Canadian farmers. However, attracting new investors and developing more workers remains a challenge due to the lack of a cohesive strategy to modernize the industry and collect robust data to identify weak spots.