Farm Credit Canada's (FCC) Chief Agricultural Economist J.P. Gervais says it’s important for Canadian agriculture to invest in innovation that will enable continued growth in productivity.

He notes Canadian farmers need to continue to focus on efficiencies and increased production of commodities in order to remain competitive within a rising tide of production around the world.

“Our long-held reputation as a safe and reliable producer of high-quality food opens the door to existing and new export markets, but competitive pressures are mounting,” Gervais said, in releasing the latest outlooks for the agriculture and agri-food sector. “The game is quickly changing and it’s becoming more and more evident that it’s mostly about volume and value added.”

Gervais said increasing productivity doesn’t necessarily mean Canadian farmers need to expand their operations.

“Canadian producers need to find ways of reducing costs while increasing productivity from their existing operations, whether that means increasing the yield per acre or getting more butterfat from a litre of milk,” he said. “Investments in innovation and technology will go a long way in ensuring Canadian agriculture remains productive, competitive and sustainable.”

Gervais adds changing food preferences are also driving investment decisions.

The food manufacturing sector’s Gross Domestic Product (GDP) is 5.4 per cent higher than at the same time in 2016.

“The climate for investment in Canadian food processing is positive, given a Canadian dollar under US$0.80, continued low-interest rates and growing demand in the U.S.,” said Gervais.

He projects exports of food manufactured products to the U.S. could increase again in 2018, despite the uncertainty surrounding current negotiations of the North American Free Trade Agreement (NAFTA).

Gervais believes this type of investment in Canada’s agriculture and agri-food sector will help keep the industry competitive and, in many cases, a world leader in agriculture innovation and technology.

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