Here is a look at what needs to happen to better support the food chain (Food Processors and Farmers)

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Agriculture and Food
- What needs to
happen - Canada
Paul Young CPA,CGA
May 7, 2020

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Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

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Agenda
 Agriculture Equipment
 Rural vs Urban Strategy
 Farm Income – 2016 and 2017
 ON and PQ vs Rest of Canada
 New Tax Policy and other Costs – Liberal Government of Canada
 Acreage value
 Size of Farms
 Food Prices
 2019 Election Issues
 2019 / Dairy Sector
 Subsidies
 Farming Crisis
 Vertical Farming
 Expert Farming

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Farming Summary
 Farmers have to deal with rain, bugs, sun, etc
 Commodity prices impact a farmer ability to sell his product
 The liberals have come to office as such have imposed more tax and regulations on the
family farm - https://www.producer.com/2019/09/farmer-slams-carbon-taxs-grain-drying-cost/
 Canada has a supply management system that manages quota. Canada has open up dairy,
poultry, etc to foreign imports via TPP, CETA and USMCA agreements.
 Farmers are looking for price support as part of the expansion of imports into Canada
 Farmers are struggling getting their goods to market - http://cafta.org/agri-food-
exports/canadas-agri-food-exports-2014/ or Trade wars - https://www.timescolonist.com/u-s-
china-trade-war-hurting-canada-s-largest-railway-says-cn-executive-1.23957432

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AG Equipment Sales

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Rural vs Urban
Justin Trudeau (LPC) vs CPC

 This is all about economic opportunity. People will select a community based on
their career objectives.
 @justintrudea supports large urbanized areas as that is his base
 @andrewscheer was part of a govt that provided allot of support to rural areas.
 https://www.slideshare.net/paulyoungcga/2019-election-rural-areas-and-affairs-
canada or https://farmtario.com/news/new-rural-caucus-chair-provides-voice-
of-the-countryside-to-government/

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Farm Income – 2015 vs 2018

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Farm Income – 2015 vs 2018
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190528/dq190528a-eng.htm
2018 Summary
2015 Summary

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z
Average Farm Income/ Canada
Source - https://www.statista.com/statistics/468483/average-farm-family-income-
in-canada/

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Net Farm Income by Year - Canada

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Small Business Tax Change / Farm and other Issues
Source - https://www.canadianpoultrymag.com/business-policy/farm-business/the-
evolution-of-tax-changes-for-the-canadian-farm-business-30601
• Ontario farmers struggle with changes to
labour laws and high hydro rates -
https://nationalpost.com/pmn/news-
pmn/canada-news-pmn/farmers-in-
southwestern-ontario-lament-high-hydro-
rates-increased-labour-costs
• Carbon Tax and Farming costs -
https://www.realagriculture.com/2018/01/will-
a-carbon-tax-negatively-impact-the-
competitiveness-of-canadian-farms/
• High fuel costs -
https://www.reuters.com/article/us-usa-fuel-
farming/farmers-worldwide-struggle-with-
rising-fuel-costs-idUSKCN1IJ0CR
• Crop Insurance - https://www.country-
guide.ca/2018/01/03/why-canadas-farmers-
need-better-risk-management-
programs/52294/
• Cost of Capital - https://www.fcc-
fac.ca/fcc/knowledge/ag-economist/farm-
assets-and-debt-report-2017-18-e.pdf

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Acreage value
Source – Stats Canada

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Acreage by Farm
Source - https://www.fcc-fac.ca/en/knowledge/ag-economics/farmland-values-report.html

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z
Acreage by Farm
Source - https://www150.statcan.gc.ca/n1/pub/95-640-x/2011001/p1/figs/figure3-eng.htm or
https://www.country-guide.ca/guide-business/how-much-bigger-are-farms-getting/

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Food
Prices/Canada
Source -
https://business.financialpo
st.com/news/retail-
marketing/canadians-vow-
to-dine-out-less-and-eat-
less-meat-next-year-to-
rein-in-rising-food-bill-
survey

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Blog – Agriculture Sector
Who do you trust more to deal with AG Sector?
 @justintrudeau who poor relations with countries have hurt the AG sector -
https://www.cbc.ca/news/politics/wheat-canola-china-canada-trade-1.5263313
 @Andrewscheer – whose party led to new trade deals and expansion of exports -
https://www.reuters.com/article/us-canadian-wheat-m-a-g3/saudi-firm-bunge-to-
buy-majority-stake-in-canadian-grain-handler-idUSKBN0N61PV20150416

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Blog – Dairy Sector
Who do you trust more when it comes to Dairy Sector:
@justintrudeau who always comes up with more ways to tax farmers - https://ipolitics.ca/2017/09/05/trudeaus-going-to-pay-
a-heavy-price-for-tax-reform/
@andrewscheer who served under a government that supported farmers very well through new trade agreements -
https://www150.statcan.gc.ca/n1/daily-quotidien/161129/dq161129b-eng.htm
Other Sources
 https://www.slideshare.net/paulyoungcga/2019-election-dairy-sector-supply-management-canada-september-2019
 https://steinbachonline.com/ag-news/agriculture-news-mb/canadian-dairy-industry-reduces-carbon-footprint
 https://www.agcanada.com/daily/farm-groups-see-something-for-everyone-in-federal-budget
 https://www.slideshare.net/paulyoungcga/2019-election-rural-areas-and-affairs-canada

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AG Subsidies
 https://www.nationalnewswatch.com/2018/06/18/canada-can-end-dairy-trade-dispute-with-u-s-by-
ending-pricing-irritant-saputo/#.WyjfZKdKhPZ

 I agree Canada should review its agricultural support, but so should the USA. USA provides over
$20B per year in subsidies. Where is Trudeau on USA subsidies?
https://www.slideshare.net/paulyoungcga/agriculture-sector-food-pricing-june-2018
 USA - https://www.canadianmanufacturing.com/exporting-and-importing/trump-tapping-us12b-to-
help-farmers-affected-by-tariffs-216532/
 Agriculture sector - https://www.slideshare.net/paulyoungcga/agriculture-sector-subsidies-and-
food-prices-july-2018

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Farming Crisis
Source - https://business.financialpost.com/opinion/gwyn-morgan-the-
traumatic-demise-of-canadas-family-farms

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Trade Disputes
 Canada and Canola “Canada’s agriculture industry needs to recognize it is “not dealing with a friendly
regime” when it comes to China and should focus its Asian growth ambitions on countries like Japan,
Taiwan and South Korea instead.” https://calgaryherald.com/business/local-business/canadian-
farmers-can-no-longer-depend-on-china-global-business-forum
 Exports “For Matt Sawyer, a canola and wheat farmer in Acme, Alta., the most pressing issue this
election is trade.
 "The last 36 months, we've lost trade with Vietnam, Peru, Saudi Arabia and China and we need to
come forward with some measures to re-establish trade for our producers as soon as we can. Bottom
line," he said. ”- https://www.cbc.ca/radio/thesundayedition/the-sunday-edition-for-september-22-2019-
1.5291065/canadian-farmers-on-trade-environmental-policy-and-the-federal-election-1.5291209

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Market Potential
 Source - http://www.prnewswire.com/news-releases/vertical-farming-market-size-worth-99-billion-by-2025--cagr-224-grand-view-research-inc-620578263.html
The global vertical farming market is anticipated to reach USD 9.9 billion by 2025,
according to a new report by Grand View Research, Inc. The increased use of
Internet of Things (IoT) sensors, for producing crops, is likely to spur the market
demand over the forecast period. The information obtained from the sensors is
stored on the cloud and analyzed to perform the required actions. The growing
automation in agriculture and increasing use of big data & predictive analytics, for
maximizing yields, are also likely to drive the market.

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Pitfalls to Vertical Farming
Source - https://www.maximumyield.com/top-3-reasons-why-vertical-farms-fail/2/3177
1. They try to do too many things at once. - A common pitfall of many vertical farms is attempting to
both grow food for market while productizing and selling the technology they’re using to grow their
food.
2. They forget that labor is always the biggest cost. Reflecting on their own shuttered operations,
each of the three panelists echoed this warning about labor: Don’t overlook your labor costs. All
three panelists express similar challenges regarding the workers on their respective farms. While
the wages were relatively low (ranging from $9-15 per hour), labor costs added up quickly thanks to
the farms’ growing techniques
3. They don’t treat the farm like a process. - In today’s technology-based modern farming world, production is
not the problem. Growing in controlled environments and with proper plant nutrition allows modern farmers to
produce crops with astounding consistency and quality. Instead, the real issue these three farmers faced was
how to run their growing operations efficiently while minimizing cost.

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IOT Market Leaders
 http://www.fox34.com/story/35300702/global-internet-of-things-iot-market-2017-size-share-
development-status-type-and-application-segmentation-forecast-by-2023

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Companies / Vertical Farming
Source - https://globenewswire.com/news-release/2017/05/17/986832/0/en/Vertical-Farming-Market-to-exceed-13bn-by-2024-Global-Market-
Insights-Inc.html
Market Leaders
• General Hydroponics
• Aerofarms
• Plantagon International AB
• Urban Crop Solutions
• Sky Greens, Green Spirit Farms,
• Spread co Ltd
• Mirai Co.Ltd.
• American Hydroponics etc.
OEM Equipment:
• EVERLIGHT ELECTRONICS
CO., LTD (Taiwan)
• illumitex (Texas),
• Koninklijke Philips NV
(Netherlands).

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Analytics and Farming
 Smarter Farming -
https://www.ibm.com/blogs/research/2018/09/smarter-farms-
agriculture/
 Big Data and AI - https://www.ibmbigdatahub.com/tag/2696
 AI - https://www.nasdaq.com/article/ai-and-farming-how-ibm-is-
bringing-cuttingedge-technology-to-one-of-the-worlds-oldest-
industries-cm1024154

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What is next
 The carbon tax needs to be scrap as it is making Canada less competitive, especially as nearly 87% of imports are coming from countries
with high CO2 emissions - https://www.slideshare.net/paulyoungcga/2019-election-environment-climate-change-issues-and-concerns-
canada-september-2019
 Small business tax reforms like income sprinkling and passive income need to be eliminated
 Trade deals need to be expanded including more money for port expansion
 Government providing funding to AG Sector - https://nationalpost.com/news/canada/covid-19-trudeau-pledges-252-million-to-help-
canadas-agriculture-and-food-industries. Liberals also bumped up the carbon tax - https://globalnews.ca/news/6500544/farm-income-
carbon-tax-saskatchewan-agricluture/
 There needs to be integrated strategy to support rural areas including how farmers can support vertical farming
 More needs to be done to solve food issues related to the north, i.e. greenhouses or other options –
https://nunatsiaq.com/stories/article/feds-to-clean-up-nutrition-north/
 Supply management system needs to eliminated. There will be a need for transitioning funding as part of eliminating the supply
management system. The Australia model should be reviewed - https://www.fraserinstitute.org/studies/phasing-out-supply-management-
lessons-from-australias-dairy-industry