AGRICULTURE IN CANADA: WHO WILL GROW THE FOOD?

Key issues in the current agricultural debate include the future of family farms, levels of government support for farms, the roles of marketing institutions and the effect of new trade arrangements. In part, these issues have arisen because of recent price volatility, but the agricultural debate has also raised basic questions: Can farming in Canada survive, and if so, what will the new farms look like? The future of farming is approached through evidence on land values and assessments of alternative land use. The future structure of farms is approached through a review of farm size, location and product mix. Farm sizes are increasingly bi-modal, with small farms relatively insulated from farm markets, and large specialized farms dependent on the market for a narrow range of commodities. Policy changes influencing product mix or regional specialization are also reviewed. About one-half of farm output in Canada now comes from the prairie region of Canada. Open trading relationships and subsidy changes are further modifying the regional location of farming. Changes in marketing board arrangements and withering of prime farmland restrictions will lead to further shifts. The following appear to be key factors in assessing future directions for farming and farm structure: For small farms, numbers are not declining, but these operations contribute relatively little to farm output. For commercial farms, technology and scale factors are leading to larger sizes and increasing specialization. Specialization is expected to occur regionally as well as within farms, and the prairie provinces are likely to become an increasingly important part of Canadian agriculture. The sizes of commercial farms are such that few farms will be financed by single families, and the balance sheets as well as the management structures of new commercial farms will increasingly mirror those in the non-farm economy.Food Security and Poverty,

Market Access in Western Canadian and Northwestern United States Table Potato Markets

This report examines market opportunities in British Columbia for Alberta produced table potatoes. The report also seeks (1) to assess the cost competitiveness of the Alberta table potato sector, compared with costs of potato production in British Columbia and the Pacific Northwest (PNW) of the United States (US); (2) to provide a preliminary understanding of potential trade flows and trading volumes based on relative cost competitiveness; and (3) to assess the importance of particular potato attributes to table potato buyers in British Columbia. The study also undertakes a description of the environment in which trade takes place between Alberta and British Columbia. This is done to document conditions under which inter-province trade takes place, and to attempt to assess whether trade regulations affect Alberta shippers differently than shippers located in British Columbia. No overt barriers to trade were found. However, some rules do appear to impose different trade practices on potatoes moving across provincial boundaries compared to potatoes that are grown and sold within British Columbia. The study finds that, based on available cost estimates, Alberta producers are strongly cost-competitive in the British Columbia table potato market. However, potato production in the Pacific Northwest is also cost-competitive in the British Columbia table potato market. While Pacific Northwest production dwarfs that of Alberta, application of similar supply functions in the two regions suggests that there is a market for both Alberta and the Pacific Northwest in the British Columbia table potato market. This estimate is made in the context of new, and in our view better than recent past, estimates of the size of the British Columbia table potato market for 1996. These estimates suggest that British Columbia-based producers face serious cost constraints to expanding potato output and that the table potato market in British Columbia represents an opportunity for 51,500 metric tonne to be supplied by competing regions. Finally, the study reports on an assessment of table potato attributes considered important to potato buyers in the British Columbia market. British Columbia buyers appear willing to pay the highest prices for potatoes that are white, medium size, and of British Columbia origin. Potatoes from Alberta and the Pacific Northwest become equally attractive compared to British Columbia potatoes when prices are slightly below those received by sellers of equivalent British Columbia grown potatoes. Study estimates suggest that table potatoes grown in Alberta are valued equally by British Columbia buyers when potatoes grown in Alberta are priced $7.70 per tonne below those of local potatoes, and Pacific Northwest potatoes are valued equally to those grown locally when Pacific Northwest potatoes are priced about$13.90 per tonne below local prices. These estimates should be viewed with caution since (a) they are "best" ones given the levels of confidence of the study results, and (b) they represent a current perception about the desirability of non British Columbia grown table potatoes. Such perceptions may be long-term or fleeting, and may be subject to change as perceptions of BC buyers change with time or with new information.Marketing, International Relations/Trade,

EFFECTS OF ADVERTISING, FOOD SAFETY AND HEALTH CONCERNS ON MEAT DEMAND IN CANADA

Food Consumption/Nutrition/Food Safety, Marketing,

SUPPLY CHAIN COMPETENCY: RECIPE FOR CEREAL AND LIVESTOCK MARKETING IN ALBERTA?

This study examines the nature of Supply Chain Management (SCM) in the Canadian barley industry, economic theories related to SCM, identifies SCM drivers and reviews the Canadian barley marketing system. Two surveys were conducted; one on the feed barley segment of the market; another on the malt barley segment of the market. These surveys provide an outline of the attributes sought by buyers of feed barley in Alberta and by buyers of malt barley in Canada and the United States. A further goal of these surveys was to assess the extent of motivations for SCM in the barley supply chain. Study methods include scaling, factor analysis and stated preference techniques to analyze purchasers' preferences for specific product attributes, business relationships and product source. The major attributes of feed barley sought by Alberta feed manufacturers appear to be physical characteristics such as moisture level, absence of foreign material, high bushel weight and uniform appearance of kernels. Features identified as of moderate importance included levels of certain key amino acids, starch level in the barley sample, as well as such seller characteristics as whether the seller was personally known to the buyer, and willingness of the seller to enter into a long-term supply contract. At the level of the Alberta feed mill industry, results therefore indicate that physical, readily identifiable attributes dominate in the selection of feed barley. As a result, the study identified that SCM is not yet a part of the awareness of barley buyers at feed mills. Among buyers of malt barley, physical or easily assessed attributes such as size of kernel, germination percentage, variety and location where produced ranked highly in a factor analysis as important to malt barley buyers. While results from the sample of Canadian and US buyers did not indicate strong potential for SCM in the malt barley sector, the study found there to be differences in attributes desired by US versus Canadian malt purchasers. Main differences were the concern of US buyers with the region where the barley was grown, and the apparently much higher willingness of US buyers to obtain their malt barley from more than one source. These differences may suggest a potential for SCM in malt barley focused on procuring supplies from regions identified as preferred locations for barley used in malt production.Industrial Organization,

OPTIMUM SOIL QUALITY ATTRIBUTE LEVELS AND VALUES

We develop a dynamic optimal cropping systems model for the northern Great Plains, taking into account the impact of the system on soil quality attributes organic and inorganic carbon. Continuous wheat and direct planting is the most profitable system under most economic conditions. This system has low soil erosion and results in high soil quality.Land Economics/Use,

BUYER PREFERENCES FOR DURUM WHEAT: A STATED PREFERENCE APPROACH

The central issue addressed in this paper is the attributes preferred by a sample of buyers of durum wheat grown in Canada. Primary emphasis is the value placed on certain visual and nonvisual attributes by US buyers of durum wheat. In addition, a source variable in the analysis is used to test preferences of US buyers for US-source compared to Canadian-source durum. The latter is a method to test whether durum millers in the US believe that Canadian durum is a superior product, a view widely-held in the Canadian grain trade. Results indicate that higher bushel weight has a positive effect on purchase probability, and appears to be more important to buyers' purchasing decision than protein content, amylase content, or the choice between no. 1 and no. 2 grade. US millers in the study are shown either a) to prefer US-grown durum over that from Canada, or b) to dislike the single desk seller arrangement involved in purchasing Canadian durum. It appears that US managers who grow or market durum wheat have a competitive edge over their Canadian competitors when marketing to US-based durum users.Crop Production/Industries, Demand and Price Analysis,

A Nutraceutical Industry: Policy Implications for Future Directions

Food Consumption/Nutrition/Food Safety,

SOIL QUALITY ATTRIBUTE TIME PATHS: OPTIMAL LEVELS AND VALUES

We develop a dynamic soil quality model to evaluate optimal cropping systems in the northern Great Plains. Modeling soil quality attributes is feasible, and attribute model results apply to a wide range of soils. A crop production system with continuous spring wheat and direct planting is the most profitable system. This system has low soil erosion and high quality attributes, indicating the benefits of increased soil quality exceed the higher maintenance costs. On-site value of additional soil organic carbon (OC) ranges from $1 to$4/ton OC/hectare/year. These values for soil OC impact the optimum tillage practice, but not the crop rotation.Crop Production/Industries,

Integrating Food Policy with Growing Health and Wellness Concerns: An Analytical Literature Review of the Issues Affecting Government, Industry, and Civil Society

Over the past few years, there has been growing global interest in the link between food and health. This paper provides a review of some of the recent literature describing these linkages. The first section provides an overview of findings that link the consumption of fruits and vegetables, meat, eggs, whole-grains, alcohol, sugar, dairy, fish, pulses, soy, and nuts to coronary heart disease, cancer, stroke, and diabetes. The authors then summarize various international and domestic non-government organizations' views about these issues. The third section centres on the food industry and its responses to growing health concerns. The fourth section is an overview of public policy relating to food and health, including the use of food policy to change consumption behaviour and address obesity. This section also includes a discussion of the relevance of policies designed to discourage smoking to the current debate on obesity. The Conclusion highlights ways in which Canadian food policy can be adapted in order to better promote health and wellness.Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Agribusiness,

AGRICULTURE IN CANADA: WHO WILL GROW THE FOOD?

Key issues in the current agricultural debate include the future of family farms, levels of government support for farms, the roles of marketing institutions and the effect of new trade arrangements. In part, these issues have arisen because of recent price volatility, but the agricultural debate has also raised basic questions: Can farming in Canada survive, and if so, what will the new farms look like? The future of farming is approached through evidence on land values and assessments of alternative land use. The future structure of farms is approached through a review of farm size, location and product mix. Farm sizes are increasingly bi-modal, with small farms relatively insulated from farm markets, and large specialized farms dependent on the market for a narrow range of commodities. Policy changes influencing product mix or regional specialization are also reviewed. About one-half of farm output in Canada now comes from the prairie region of Canada. Open trading relationships and subsidy changes are further modifying the regional location of farming. Changes in marketing board arrangements and withering of prime farmland restrictions will lead to further shifts. The following appear to be key factors in assessing future directions for farming and farm structure: For small farms, numbers are not declining, but these operations contribute relatively little to farm output. For commercial farms, technology and scale factors are leading to larger sizes and increasing specialization. Specialization is expected to occur regionally as well as within farms, and the prairie provinces are likely to become an increasingly important part of Canadian agriculture. The sizes of commercial farms are such that few farms will be financed by single families, and the balance sheets as well as the management structures of new commercial farms will increasingly mirror those in the non-farm economy