As I continue thinking about the topic of Canada’s Food Strategy and where we could go from here, I am also listening to the news and hearing a lot of things that will certainly make developing such a strategy a major challenge. These things may even prevent the successful implementation of such a strategy. Let’s look at a few of the issues. They affect mostly the strategy of New Market Access and Development.
Increasing exports is currently one of the key strategies for the Food Processing Industry Roundtable’s (FPIRT) vision of “Canada, Bread Basket to the World.” As referred to in the last article, there is likely to be a 70-per-cent increase in food required to feed the nine billion people who will be on the planet by 2050. Canada could well become the Bread Basket to the world. We have the resources to become a major player. But that assumes that the “age of globalization” is not over, and I’m hearing people on the news commenting that they think it might be coming to an end. There is some evidence to support that view.
First of all, with the BREXIT vote, and the probability of Britain pulling out of the EU, what is going to happen to CETA, the Comprehensive Economic and Trade Agreement between Canada and the EU? We are hearing that it will go forward with agreements being signed between Canada and Britain, and between Canada and the EU. But there is a lot of uncertainty at this point about what will happen in total with the EU. Will other countries leave? With all of this turmoil, will Europe continue to have strong potential as a trade partner with Canada? Who knows?
U.S. presidential election
Second, the U.S. presidential election could have some major issues for Canada as an exporter. Depending on who is elected, it could impact both NAFTA (North American Free Trade Agreement) and the TPP (Trans-Pacific Partnership). One of the presumptive candidates has been clear that he never supported NAFTA and feels that it is hurting the U.S. economy. He has also indicated that he is not a supporter of the TPP.
Just to look a bit at the TPP, it was signed by 12 countries in February 2016 based on a draft that was written in October 2015. Each country now has two years, starting in February 2016, to ratify the agreement. Depending on who is elected president in the U.S., there could be a strong chance that it will not be ratified there, at least not in its current form.
As for NAFTA, it will definitely be affected if the TPP does get ratified, and that has been known for some time. And any changes made could have a negative effect on trade between Canada and the U.S. Further, depending on who gets elected, the candidate who is unsupportive of NAFTA could take a strong stand against its continuation in its current form whether or not TPP gets ratified. NAFTA could come to a complete end, despite the image of the Three Amigos we saw recently.
So what does all this mean to the idea of developing a Canada Food Strategy? Well, like all “corporate” strategies, there are always assumptions made in the development of the strategies, especially about the external environment within which the company operates, that might change, and as a result the strategic plan would need to change. Sometimes the marketplace changes dramatically or the regulatory environment changes in a big way. Companies often have to review and renew their existing strategic plans in such cases.
In the case of growing exports globally for “Canada Food Inc.,” perhaps some time should be taken as we wait to see the results of BREXIT and CETA, of the U.S. election, and the evolution of TPP of which we should also know more after the U.S. election. Then it would make sense to start evaluating the export strategy.
Also, there are so many other strategic initiatives that we can focus on such as:
- Increasing our innovation capacity in “Canada Food Inc.”;
- Improving our productivity and competitiveness along the entire value chain;
- Improving the collaboration among the many layers of the value chain and between the commodity sectors; and
- Improving the overall sustainability of our industry, again, among the layers of the value chain.
Much can still be done now among the FPIRT issues and the issues I have raised in previous articles. We can’t stop. We need to keep moving forward and work on the Export Development part when things become a bit clearer.
Let’s do it!
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent more than 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at [email protected]