November 30, 2021 – CCC president Jim Everson presented the following speech on ‘Navigating change through innovation’ at the Canola Week virtual event this morning to attendees representing all links in the canola value chain. His presentation included a look at the state of the canola sector today, the opportunities and challenges ahead, and the importance of investment in research and innovation to increase production and help our sector respond to the growing calls for enhanced sustainability and greenhouse gas emissions reduction.
Navigating change through innovation
Good morning! I’m Jim Everson, President of the Canola Council of Canada.
Welcome to Canola Week and today’s Canola Industry Meeting. This morning we’re setting the table for three days of discussions that will have a big impact on the future of the canola sector.
Each year, this event brings together the canola sector with a focus on innovation. The Canola Council’s Discovery Forum tomorrow will look more deeply into the latest science and innovation underpinning the competitiveness and sustainability of our industry.
It is hard to overstate the importance of your work, as researchers, agronomists and scientists. Canola, quite simply, is all about innovation.
And what an industry it is. Today canola contributes nearly $30 billion annually to the Canadian economy, including more than 207,000 Canadian jobs. That contribution increased by 35 per cent in the last decade alone.
Canola itself is the product of Canadian innovation. And the competitiveness of the industry – the record of growth since the ‘70s – is a story of continued innovation.
How many industries can you name where the main product was invented by Canadians, is the most valuable product in its class and where Canada leads world production and trade?
We cannot undervalue the importance of research and innovation in driving our industry forward.
Let me begin by considering the state of the canola sector today and the opportunities and challenges ahead.
First and foremost – what a challenging production year.
Growers dealt with a Prairie-wide drought that led to a rationing of sales to export markets and very low ending stocks.
But, our sector has been through this before. In 2002 and again in 2012, we experienced production downturns due to climate extremes across the Prairies. In both circumstances, the crop rebounded well in terms of production and oil content.
This coming year, there is an additional challenge. The recovery may be hampered to some degree by pandemic related supply chain challenges.
Obviously, no one has a crystal ball – we will need to monitor conditions closely, but we hope for a strong recovery in 2022.
Looking at today’s business climate, the word that comes to mind is “unpredictable”. The global trade environment is buffeted by challenges:
- Recovery from the global pandemic is uneven, disrupted by a tenacious virus and related supply chain challenges;
- The trade disruption in canola seed with China continues;
- And global efforts to mitigate climate change are altering the commercial environment with taxes and regulation.
But, the fundamentals of global demand are in our favour.
- The world’s growing middle class is continuing to seek out healthier food products like canola oil and canola protein.
- Palm oil growth has slowed as the industry has been challenged by sustainability concerns
- And there is growing demand in new areas – including aquaculture and protein for human food ingredients.
- Most significantly, as part of the global effort to address climate change, more countries are introducing renewable fuel mandates to reduce greenhouse gas emissions. Canada and the U.S. are among them.
This is a huge opportunity for our industry because canola oil is one of the best feedstocks available for renewable fuels. This graph shows how much North American demand for canola is expected to increase if we can establish a firm foothold in this market.
The CCC is very active in discussions with the Government of Canada as work is done to finalize the Clean Fuel Regulations, which we anticipate will be in place by the end of 2022.
If done properly, the standard will drive new demand for canola.
The impact of these two factors – high demand for Canada’s sustainably produced, healthy oil for food use and low carbon emission canola for diesel fuel are driving investment and growth in our industry.
By 2025, Canada will be able to process 50 per cent more canola seed than today, thanks to more than $2 billion in capital investments announced by our canola processors. These expansions will create a steady source of canola demand for surrounding farmers, plus good, reliable jobs for thousands of Canadians.
In short, while we are charting a course through a very unpredictable period, the long-term demand signal for canola is strong. Together, we’re reinforcing canola’s reputation as a healthy cooking oil, high quality protein and excellent feedstock for clean, renewable fuels – all derived from a crop that is sustainably grown by highly experienced Canadian farmers.
With all this opportunity before us, one of the biggest challenges facing our industry is growing more canola to keep up with demand. Today – this week – we need to focus our collective efforts on growing the supply of canola in a sustainable, profitable way.
I expect everyone here is aware of the industry’s strategic target of increasing the productivity of every canola acre. We’re aiming to achieve average yields of 52 bushels per acre to meet global market demand of 26 million metric tonnes of production by 2025.
Meeting our yield target is job number one.
To get there, growers will need continued advancements in agronomic practices, as well as access to new tools, like higher-yielding cultivars, smart fertilizers and a wider range of resistance to disease, extreme weather and pod shatter.
These improvements will be driven by innovation – and by you – the people who are taking part in these Canola Week discussions. We know through experience that the canola value chain is a powerful force for positive change.
Another key objective is responding to the growing calls for enhanced sustainability and greenhouse gas emissions reduction.
When considering the challenges ahead and the priorities for research, there is no doubt that addressing climate change and the environmental aspects of production will be high on the agenda. From the expression of global commitments evident in the recent Glasgow COP26 meetings, to the domestic biofuels agenda, to the recent ‘Guelph Statement’ of federal-provincial-territorial agriculture ministers, climate change and the environment will be a critical lens through which research priorities and funding will be considered.
So, how is our sector tackling the climate change & sustainability challenge?
Let’s start by recognizing that the canola sector is a ‘solution-provider’ when it comes to the environment. Canola takes carbon from the atmosphere turns it into oil and protein that we can use for food and fuel. As it grows, it takes carbon from the atmosphere and sequesters it in the soil.
As our industry increases production intensification to meet our goal of 52 bushels per acre by the year 2025, we will sequester an additional five million tonnes of greenhouse gas emissions in the soil each year.
Used in renewable fuels production, canola can reduce GHG emissions by up to 90 per cent relative to traditional, petroleum-based diesel fuel, which is why canola demand will increase with government policy to mitigate climate change.
So, the crop itself is a solution.
Second, let’s recognize that Canadian grain farmers have and are contributing to production sustainability each day, each and every production season. Growers care deeply about their stewardship of their most valued resource: their land. We need to focus on providing the science-based knowledge and discovery to support them.
I hear a lot about ESG these days – Environmental, Social, Governance. For me, the grower has been there well before others. Growers have been quick to adopt technology that improves environmental outcomes – from no-till to pod shatter resistance. Growers are invested in passing their operations on through the family and aim to improve the productive capability of the land for their children.
In the social realm, rural communities draw their energy from growers – who populate the school boards, coach hockey and employ thousands across Canada.
So, the canola grower is a solution provider too.
Sustainability is a journey, not a destination. And, it’s a journey that should be characterized by transparency, measurement and continuous improvement principles, which align well with canola’s focus on innovation.
So, the real question is how do we, as an industry, continue to provide innovative products and practices to the grower and the whole value chain, which meet our goals for increased production to meet global demand, while ensuring sustainability and reducing emissions.
As with all the big advancements in canola, investment in innovation and research will again be the answer.
Earlier this month, federal, provincial and territorial agriculture ministers released the “Guelph Statement” setting out priorities as they discuss the next five-year agriculture policy framework.
Included among those priorities are tackling climate change and environmental protection to support GHG emission reductions, which is also reflected in the federal government’s previously stated objective of a 30 per cent emissions reduction target for nitrogen fertilizers by 2030.
Nitrogen fertilizer is a critical tool for farmers in growing the world’s healthiest vegetable oil.
Reducing emissions from fertilizer cannot mean simply regulating reductions in fertilizer use. To do so would hinder the competitiveness of Canadian canola farmers in global markets and their ability to meet the world’s needs for a healthy vegetable oil.
Rather, the objective must be innovating to reduce emissions from fertilizer use, supporting growers in moving to more precise fertility practices and crediting the grower and industry for sequestering carbon through canola production.
The chart here shows that fully 84 per cent of on-farm emissions in canola production come from the use of nitrogen fertilizers. So, a focus on nitrogen emissions is not misplaced when it comes to reducing GHG emissions.
Meeting the world’s demands for more canola oil – as a healthy food and increasingly also as a low carbon fuel – while also reducing emissions from nitrogen fertilizer, will also take investment.
The Guelph Statement identifies several other critically important priorities for Canada’s agriculture ministers too. Market access, market development and trade are essential elements of our export-focused sector. Sector growth and value-added processing equally so.
To meet these priorities, while also addressing climate change, will require substantial investment by governments. It would be a mistake to reduce funding to market access and promotion, to technology adoption and to agronomic research by shifting existing resources to other challenges. To meet the challenge of climate change, governments will need to increase funding – both through the five-year partnership and through funding programs geared to climate change mitigation.
Recently the Royal Bank of Canada issued a report highlighting the investment that would be required to meet the government’s commitments to GHG emission reduction, including in agriculture. The report says: “While some of these GHG reductions can be achieved at relatively low costs, most will be expensive and require new processes and capital investment.”
The report suggests an investment of $2.5 billion annually would be required to tackle climate change in agriculture.
This brings us back to Canola Week and the focus on the critical research and innovation that’s happening in our sector. To repeat an earlier comment, it is hard to overstate the importance of your work.
All indications are that our industry will require more canola production to keep up with global demand. At the same time, we need to do so sustainably and contribute to the global effort to reduce GHG emissions.
Canola is a great product and a solutions provider on the environment front. Our growers are committed to sustainable production which is central to the endurance of their farms.
As we prepare for the next round of research funding, we’ve launched a comprehensive analysis to update the innovation strategy for the canola sector. Led by JoAnne Buth and Curtis Rempel, the strategy started with a consultation with all Canola Council members in all parts of the value chain. Curtis will speak about it in tomorrow’s Canola Discovery Forum and we look forward to your feedback, as important stakeholders in canola’s research and innovation agenda.
Programs like the Canola Agronomic Research Program and the Canola AgriScience Cluster are successful because all parts of the value chain have input into where the funding will provide the most benefit.
There are so many ways to put research dollars to work, and we need your help to make the best investment decisions and be ready with a clear, shared vision of where future government investment can provide the most benefit.
Governments will be making these funding decisions at a time of immense pressure on the public treasury. As we emerge from the pandemic, policymakers will be challenged to restore financial stability while also spurring on the economic recovery.
At this critical time, we need to remind governments that canola is poised to continue to drive economic growth, and that canola research is an essential investment in Canada’s economic future.
For example, consider the rapid progress we’ve made in blackleg management in just the last few years, with better understanding of the durability of resistance genes, and the development of a rapid DNA test to identify blackleg races.
Publicly supported research has also taken much of the guesswork out of managing clubroot, which was unfamiliar to Canadian canola growers just a decade ago. In one important study, researchers found that the most effective way of reducing disease severity and yield loss is to use clubroot resistant varieties plus crop rotations with at least two years between host crops. Clear, evidence-based knowledge like this is essential for managing this new threat.
New research is also shedding light on how the environmental footprint of agriculture can be reduced – not just for canola production, but also for the larger bioeconomy. For example, a recent study funded our Canola AgriScience Cluster program has shown that canola meal helps to reduce greenhouse gas emissions in dairy herds. Researchers found that cows excrete less methane when they consume a diet rich in canola meal. Instead of being lost to the atmosphere, that energy is channeled into the production of more milk. Cows also convert more dietary nitrogen into milk protein, so less nitrogen ends up in the cow’s urine, where it is more likely to become ammonia and nitrous oxide.
Success stories like these will be shared with Ottawa and the provincial governments as we remind them of the importance of supporting canola research. We have no doubt that canola’s economic benefits would not have grown so quickly over the last decade without the advances made possible by our research partnerships.
So, in summary: This is a time of significant disruption and uncertainty for the Canadian canola sector. It’s also a time when we see great opportunity on the horizon, but not without some big hurdles to overcome along the way.
With continued investment and teamwork in research and innovation, we are confident we can break through to the next level of productivity. And we can do it in a way that is truly sustainable and aligned with market demands. Getting there will require the cooperation of our partners in government – as both research partners and policymakers.
We’ll also need the commitment, ideas and enthusiasm of the entire canola value chain. These strengths are the lifeblood of our sector and have never been more essential than right now.
Thank you for contributing to this coordinated and collaborative approach. I look forward to the meetings this week and what we will all achieve together.
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