Evolution of agriculture industry structure and user needs

The Canadian agriculture and agri-food system is a complex integrated production, transformation and distribution chain of industries supplying food, beverages, feed, tobacco, biofuels and biomass to domestic and international consumers (Chartrand, 2007). It is an integral part of the global economy, with trade occurring at each stage of the chain. However, the relative contribution of primary agriculture to Gross Domestic Product (GDP) and employment has been declining significantly. Although the value of agricultural production has tripled since 1961, the Canadian economy as a whole has grown at a faster rate (by six times), driven mainly by growth in the high-tech and service sectors (Agriculture and Agri-Food Canada, 2006). The result has been a drop in the share of primary agriculture to about 1.3% of GDP. On the other hand, the agriculture and agri-food industry as a whole remains a significant contributor to the Canadian economy, accounting for 8.0% of total GDP and 12.8% of employment in 2006 (Agriculture and Agri-Food Canada, 2008).

The rapid pace of the evolution in the structure of the agriculture industry can be partially illustrated by examining the changing number and size of farm operations in Canada. After peaking in 1941, farm numbers have fallen steadily while total agricultural land has been relatively stable, resulting in a continual increase in average farm size in Canada during this time (see Figure 17.1). Moreover, agriculture production has become much more concentrated on larger farms. Figure 17.2 shows that an increasingly smaller proportion of farms accounts for the majority of sales over time.

As farms become larger, with more complex legal and operating structures, the tasks of collecting, processing and analysing data for the industry, and, ultimately, measuring its



Figure 17.1 Farm numbers fall while average farm size increases. The trend towards fewer but larger farms continues in Canada. Source: Census of Agriculture.

Figure 17.1 Farm numbers fall while average farm size increases. The trend towards fewer but larger farms continues in Canada. Source: Census of Agriculture.


18% -|-

16% 14%

1951 1961 1971 1981 1991 2001 2006

Census year

Figure 17.2 A smaller percentage of farms is needed to account for half of the agricultural sales. Concentration has been increasing - sales becoming more concentrated in larger operations. Source: Census of Agriculture.

performance, have also become more complicated and difficult. The growing importance of vertically integrated operations, increased contractual arrangements and more varied marketing opportunities such as direct marketing, dual markets and numerous payment options have added to this complexity.

The structure of Canadian agricultural production and marketing began changing more rapidly in the latter part of the twentieth century with the increasing adoption of new technologies on farms (including more substitution of capital for labour and realization of economies of scale), changes in domestic and foreign agriculture policy, and rising globalization, among others. For example, Growing Forward, Canada's agricultural policy framework implemented in 2008, 'is a new commitment to Canada's agriculture sector that's focused on achieving results, reflects input from across the sector, and will deliver programs that are simpler, more effective and tailored to local needs'.2

At the same time as policy agendas of governments were changing, users of agriculture production, financial, trade, environmental and other related data identified needs for more detailed and integrated statistical information that would illuminate current issues. They also put more emphasis on the quality of the statistics, as will be discussed in the following paragraphs.

0 0

Post a comment