Agricultural research requires investment, but it takes many years to develop a higher yielding crop variety or one with improved disease resistance.
Recently announced funding and job cuts by Agriculture and Agri-Food Canada are expected to impact the quantity and possibly the quality of new research in both the crop and livestock sectors.
Richard Gray is a professor and grains policy chair at the University of Saskatchewan and was a key note speaker Thursday at the Top Crop Summit in Saskatoon.
"I think the lack of a plan to how they were actually going to do some of the activities that were happening on those farms, that's a problem, and second, I don't think there was enough thought given to whether the sites that they were closing down were important for overall productivity of the researchers that remain." Gray said of the pending closures of research sites across Canada.
The Indian Head research site represented about 35 per cent of the crop area in the province and was located in the black soil zone in the east-central region, he noted, while the Scott site represented about 27 per cent of the crop area and located in the dark brown soil zone in the northwest.
Researchers outside those areas often utilized the sites to test varieties to see if they work in the field.
"In fact, the soils are different as well. The four sites that they've retained actually have considerably lower soil pH than what Indian Head represents, for example. Different soils will mean different responses, and certainly you also get different weather conditions over those soil zones as well. So it does matter where you locate these sites, and you need sites that are representative of where the producers are actually growing grain." he explained.
Asked if there were other areas of AAFC that could have been reduced, other than research, Gray pointed to business risk management programs.
While popular among producers, he said BRM programs offer "a low benefit-cost ratio, whereas agricultural research has this very high benefit-cost ratio."
"Agricultural research makes farms competitive internationally, and being more productive means that you're going to be able to survive lower price periods, you're going to be able to survive poor weather conditions, etc. So, in terms of resilience, you're probably still better off to invest in research rather than saying, let's cash a check this year and not worry about the future." Gray added.
Looking elsewhere for a solution
During his presentation, he compared wheat in Canada compared to other parts of the world such as the European Union and Australia. He said Canadian research, combined with investment, played a vital role in developing varieties that are more resilient to diseases such as stripe rust, leaf rust, stem rust, and Fusarium Head Blight, compared to others.
"So it's a success story here, but if you go to Europe, they've had several major crop failures due to disease. That's in part because they haven't made the same investments. The private firms, they need to make dollars in the short run, they don't think as much about the long run.
"It's particularly true because if they do manage to stack a bunch of resistance genes into one of their varieties, their competitors can very quickly take their varieties and use that as breeding material to copy, more or less, what their competitors are doing. So nobody has the incentive to make these long run investments, and so they've really failed to create a system there for durable disease resistance, and as a result, yields have been flat for 30 years."
While Canada has been competitive in developing varieties for a long time, the reduction of sites, staff, and funding at AAFC pose challenges. With those challenges come opportunities to find alternative solutions.
Looking to Australia as an example, Gray said they have a good system that Canada should examine and possibly emulate.
Most "of the research and breeding" done in Australia is "within producer control", Gray said, with "a very strong levy system that's matched by the federal government, but it's controlled by a producer-nominated board of directors."
"They also have an end-point royalty system, which provides a large revenue flow back to those programs that are owned, if you like, by either public or producer, with some private enterprise involved." he added.
In Saskatchewan most crops, except for pulses, have a refundable producer levy. Asked if the current system needs to change and if getting the government involved would leverage more money, Gray believes it could.
"And I think in Australia it was a bit of a bargain. The government would agree to match the levies if they were non-refundable, and if you talk to an Australian about the idea of a refundable levy, they'll just sort of chuckle and say, 'why would you have a refundable levy? Everybody benefits from the research, why shouldn't everybody have to pay for it?'"
Also asked if Agri-Invest could be a source of research funding in the future, Gray referred back to the high rate of return on investment from research as opposed to Agri-Invest which producers who use it only "earn a savings rate of return on that investment."
Gray also noted Agri-Invest was created in 1991 at a time when "Saskatchewan had been in a 10-year period of declining land prices, and there were bankruptcies all over the place." However, producers are in a better place now with land values doubling "in the last six or seven years alone" and a better balance sheet.
"So to me it makes sense for producers to think about, if they really want to have a system that's going to increase the value of their land and the value of their farm and generate income in the long run, they need to think about whether they should encourage government to support research for those dollars rather than the programs like Agri-Invest."
(with files from Neil Billinger, CJWW)
