Promoting Industry Development through Commodity-Based Clusters
By Lindsay Grummett
GLOBAL FOOD LEADER
With more than seven billion people on the planet including over 35 million Canadians, the global food industry has a lot of mouths to feed. Fortunately, Canada’s diverse agricultural landscape and solid workforce is the ideal support system for its developing food industry.
Investment in food and food research is necessary for success in the national and international market. The country’s agriculture and agri-food system involves a variety of food industry sectors including primary agriculture, food and beverage processing, food distribution, retail and wholesale, as well as foodservice and the service supplier industries.
A 2013 report released by Agriculture and Agri-Foods Canada (AAFC) highlights the fact that the competitiveness of this sector depends on its ability to remain profitable and viable over the long term with regards to its competitors in relevant markets.
“Universities, private organizations and federal organizations come together and submit a big proposal that is made up of several smaller research activities.”
The development of food clusters offers promising opportunities for accelerated success and industry growth. A food cluster is a network of interconnected organizations that have particular interests in a specific sector of the food industry.
“Universities, private organizations and federal organizations come together and submit a big proposal that is made up of several smaller research activities. It is normally submitted by a not-for-profit organization or for-profit organization,” says Joyce Boye, a research scientist at Agriculture and Agri-Foods Canada (AAFC).
These clusters are headed by one organization external to the AAFC that is accountable for the project’s execution and all associated reporting of spending and results. Many of these organizations have already developed networks of industry professionals that are fostering growth in their specific sector.
“We’d been working with our partners over the last 15 years at the start of Growing Forward. It was already something that was well set up and we’d been funding through a previous agreement. Growing Forward was the next step to continue expanding it,” says Wayne Thompson, research program manager at the Western Grain Research Foundation (WGRF).
Governmental initiatives like the above mentioned Growing Forward are pushing the benefits of commodity-based clusters to industry professionals in hopes of coordinating a critical mass of scientific expertise throughout the industry, academia and the government.
The ever-expanding global market has made the food industry even more competitive and companies now must find new ways to stay on top in the food sector. The federal government is fostering growth throughout the country by not only promoting the value of commodity-based clusters but also by backing the industry with financial support and investment.
The AgriInnovation Program is just one of three new federal programs that came into effect this year under the Growing Forward 2 (GF2) policy framework. GF2 is a $3 billion dollar investment by federal, provincial and territorial governments looking to create a more profitable and innovative agriculture, agri-food and agri-based product industry.
“Growing Forward 2 is building on Growing Forward 1,” says Boye. “With GF2, the programs are AgriInnovation, AgriCompetitiveness and AgriMarketing. These are designed to help push things through the entire value chain, to get products out there, and to get companies to be more competitive and innovative.”
Growing Forward 2’s AgriInnovation Program provides non-repayable support to agri-science clusters and agri-science projects in hopes of accelerating the pace of innovation allowing for the commercialization of new products and technologies. This $698 million program will run over the next five years with $468 million in funds available for applicants from within the industry.
“There are some groups who were not ready to submit proposals under GF1 that are now submitting under GF2. We will see how all of that unfolds in the coming year as cluster proposals are being reviewed. I anticipate that this will provide the different sectors the critical mass needed to have an impact,” says Boye.
In 2009, the Beef Cattle Industry Science Cluster was created under the original Growing Forward framework. Formed through a partnership between Agriculture and Agri-Food Canada (AAFC) and the Beef Cattle Research Council (BCRC), this cluster focused on two core research areas: improved production efficiency as well as improved beef demand and quality. Over five years, 32 research programs received a total of $11.25 million with one third of the money going to beef quality and food safety research.
“The obvious point of funding there is to help the industry improve consumer confidence and beef demand through improved food safety and quality,” explains Dr. Reynold Bergen, the science director at the Beef Cattle Research Council.
The BCRC used a portion of the funding to paid for a beef quality audit which included a consumer satisfaction survey. Bergen says he was please with the results which showed increase in consumer approval.
Although this type of research may seem trivial, its gives the industry a standard by which they can measure their successes. “It’s really important that there’s an industry benchmark so we can figure out where we need to improve and where we should back off with the emphasis,” says Bergen.
Funding recipients are also required to financially contribute to the cost of research. Under the first Growing Forward program these contributions ranged from 15 to 30 percent depending on the cluster. When the Canadian Wheat Breeding Research Cluster received $6.2 million from the federal government, its lead organization, the Western Grains Research Foundation (WGRF), pitched in $2.1 million.
The Western Grains Research Foundation is a farmer funded, non-profit organization that invests and supports wheat variety development. The WGRF’s money is collected from the wheat check-off program that gathers funds from agricultural producers and uses it to promote research. Canadian wheat farmers pay $.048 per tonne of wheat sold in B.C., Alberta, Saskatchewan and Manitoba whereas beef producers pay $1 for every cow sold across the nation.
“In Canada, there’s a national check-off that’s collected every time an animal is sold. That check-off gets used for two things: about 85 cents supports marketing and promotion activities and the other 15 cents is allocated to research and that comes to us,” says Bergen.
The Beef Cattle Research Council is the lead organization for the beef cluster and their mandate is to fund research that will contribute to the sustainability and competitiveness of Canada’s beef industry.
“Since we have complementary strengths, we’re able to work together to focus our efforts in areas that are of mutual interest and benefit.”
“What we’ve seen over the years is that funders swing from one priority to another which comes at the expense of maintaining core activities in areas like beef quality or food safety research,” says Bergen.
The Beef Cattle Industry Science Cluster was created as a way to manage the funding and resources within the industry to promote more consistent industry research.
“Ag Canada has a lot more money than we do. They also have really good research stations and great scientists. Part of their job is to do applied research, but they’re not directly connected to the industry,” says Bergen. “We’re exactly the opposite – directly connected to the industry, but with little funding, no scientists and no place to do research. Since we have complementary strengths, we’re able to work together to focus our efforts in areas that are of mutual interest and benefit.”
Research is an integral part of growth in any industry and the information obtained from the Beef Cattle Industry Science Cluster is helping to advance the Canadian beef industry and improve producers’ bottom lines. With the success of this Cluster, planning for the next Beef Cattle Industry Science Cluster under Growing Forward 2 is now complete and awaiting approval.
The Wheat Grains Research Foundation also saw progress in its efforts with variety development and is expanding to a national scope for GF2.
“We’ve gone from a western Canadian cluster to a national cluster. It’s going to make for a stronger program because there will be much more formal collaborations and relationships,” says Thompson of the WGRF.
In addition to variety development, Thompson says the new wheat cluster will focus on advancing disease resistance and genomic work.
“We need to be developing new wheat varieties and looking to the future. If we don’t maintain a breeding program that tries to continually develop new disease resistance, [the wheat] will eventually succumb to the diseases and lose the yield. It needs investment to continue to be successful and contribute to the farmer’s bottom line,” says Thompson.
The future of the Canadian food industry is strong; however innovation is important for continued success.
“Food research is important for a variety of reasons whether it’s in regards to quality, taste, flavour, food safety, or the health and nutritional properties of food. It is important to make sure we are doing research to have the best quality food at the best possible cost while ensuring the nutritional and health properties of the food,” says Boye.
Food clusters offer fresh ways for individuals and businesses in the food industry to connect with support, improve their processes and increase productivity. In addition to that, they promote and foster forward-thinking ideas that will push the Canadian food industry into a leading role as a global food producer. From farms to production plants to grocery stores, all areas of the food industry can benefit from food clusters. Continued support from government, businesses, organizations and individuals for provincial and commodity-based food clusters will quicken the pace towards a strengthened and more productive industry.