(adapted from MacRae et al., 2009)
Adoption of sustainable food system is low in Canada, in part because the state has failed to properly support the transition. As presented in Get Started, sustainable approaches resolve many food system problems, but Canadian governments have treated truly sustainable food and farming as a niche market, not as a solution to multiple dilemmas. In contrast, several European countries have extensively supported adoption of sustainable systems, and in some countries (e.g., Italy, Switzerland, Austria and several Baltic states), conventional production no longer really exists, with the organic sector at over 10% of the agri-food economy and/or production area (Willer and Lernoud, 2017) and other sustainable approaches followed by the rest of producers. In a further indication of how far behind Canada lags, Pretty et al. (2018) have estimated that 29% of farms globally and 9% of global agricultural land (many of course small enterprises) have been redesigned using agroecological approaches.
Although all sustainable food production and consumption is on the rise, only organic is relatively easy to track and the issues with organic agriculture are indicative of challenges for most sustainable production systems. With growth in retail sales estimated at 15–25% per year, organic food represents the only significant growth sector in Canada’s food system (The Nielsen Company. 2006). This explains, in part, the spate of organic firm acquisitions by conventional food companies (Phil Howard, Organic processing industry structure). However, only 15–40% of the organic food consumed in Canada is produced domestically (The Nielson Company, 2006; Macey, 2004). The rest is imported, primarily from the United States (perhaps 70–75%) and Europe (Macey, 2004; Willer and Leroud, 2017). In contrast, 70% of conventional foods consumed domestically are produced in Canada (AAFC, 2006). Consequently, Canadian farmers are missing out on many of the market opportunities that organic demand presents, at a time when net farm income in aggregate has been low (AAFC, 2003-2013). Without domestic production to match demand, the significant environmental, health, financial and social benefits that can be associated with organic food production, processing and distribution (see Get Started) are accruing elsewhere. Global trade in organic food is also contributing to greenhouse gas (GHG) emissions, causing many in the sector to question an export/import-oriented organic agricultural strategy. Market demand, on its own, appears to be insufficient to rapidly attract new Canadian organic producers and processors. It appears that even the presence of significant price premiums is insufficient to overcome the anxieties about and real challenges of the transition to organic production. European evidence suggests that only with supportive government interventions will the supply of organic foods increase relatively rapidly (Michelsen et al., 2011).
Government intervention to support the transition to sustainable food is justified for many reasons consistent with historical interventions in the food and agricultural economy. Sustainable food is an immature industry and governments have supported infant food industries in the past, in Canada notably the canola oil industry on the Prairies and the wine sector in Ontario. Government investments in sustainable food progressively correct market failures—the fact that current approaches to production, processing and distribution do not reflect real costs, generating significant externalized costs the private landowners, the general public and governments have to pay for later. In theory, as the social and environmental benefits grow with organic farming adoption, government liabilities for these unfunded externalized costs should decline (Pretty et al., 2000; Tegtmeier and Duffy, 2004).
However, the current Canadian approach to advancing sustainability is too limited. Only about 8% of expenditures to support the agriculture sector are for agri-environmental programming (AAFC, 2012). Highlighting how much we lag behind our main trading partners, Farmers for Climate Solutions estimated that the US spends 12 times more per acre than Canada on climate-friendly farming supports and the EU 74 times more, with our contribution a paltry $0.7/acre. A suite or environmental programmes under the Agricultural Policy Framework (APF) and Growing Forward (GF1,2 and soon 3, name changed to the Canadian Agricultural Partnership) have generated only modest environmental improvements. The programmes do not follow an agroecological approach, are voluntary, there is limited to no targeting of regions making the most significant contributions to problems and uptake is consequently suboptimal (see, for example, analysis of Environmental Farm Plan uptake relative to environmental hotspots).
Programming is dominated by a best practices approach, rather than systems change.
- Systems comprise a fundamental and permanent land use change. Ensuring long-term benefits with practices is difficult, since changes are driven by environmental and financial conditions that vary yearly.
- In a practice-based approach, growers pick and choose components, making the adoption process difficult to manage and monitor. While systems approaches also involve choosing between options, these options come in more integrated packages.
- Monitoring for compliance is difficult in a practice-based approach. With systems, monitoring is more straightforward, especially if protocols are established and recognized.
- Few practices are likely to reduce producer costs or present marketing opportunities. This is a problem with Environmental Farm Plans. They typically increase costs (and governments pay for some that on a cost-share basis) and farmers can not gain any price premiums from the market place, in part because farm organizations do not want to be transparent about what changes individual farms are making.
- Practice-based approaches often focus on a mix of (potentially incompatible) strategies. For example, efforts to improve soil moisture capacity to moderate moisture variability may result in increased N20 emissions.
The European experience developing the organic sector reveals key instruments that have been critical to successful uptake of systems approaches (Michelsen et al., 2001). Most of the countries with significant development have used a mixture of supply-side and demand-side policies and programs, including:
1. Definitions of organic agriculture.
2. A uniform national (and for Europe an EU level) standard, with political recognition of standards, certification and accreditation. In the EU, there have been statistically positive impacts from introduction of the EU standard.
3. Financial support for transitional growers. Numerous studies show initial positive impacts from direct payments in the agri-environmental schemes; however, modifications to the schemes in the more mature countries like Denmark and Austria appear to have
accelerated existing organic farming growth, but not necessarily brought in significant numbers of organic farmers.
4. Advisory services and training to support the adoption process.
5. Local institutional supports for organic farming.
6. Supports for the development of organic markets—supermarkets and institutional buyers are often drivers of demand in Europe.
7. Coordinating and advising institutions to advance organics with positive participation and interaction with the conventional farming sector.
Canada does now have a definition and national standard for organic food and farming with associated verification and accreditation processes supported by regulation under the Canadian Agricultural Products Act (transitioning to the Safe Food for Canadians Act in early 2019), but comparable definitions and standards are largely lacking for other sustainable approaches. The other key dimensions identified from European literature are decidedly deficient in Canada and are the focus of the proposed strategic interventions.
Financing the transition
(adapted from MacRae et al., 2009)
In addressing the specific case of Ontario, MacRae et al., (2009) set out some of the elements of financing the transition. Many instruments of this transition have a very modest price tag and may, as has been documented in Europe, result in other program savings, so the net expenditures for governments will be lower than the gross expenditures. If post-transition, farmers are better off financially, this may also result in lower draws on farm financial safety nets, and additional potential savings. Finally, government liabilities for environmental clean up may be reduced since the transition to organic farming reduces many externalized costs.
In a classic case of "you get what you pay for", Canadian government spending on environmental programming for agriculture is very low compared to the EU and the US, and this is limiting the transition and also the potential savings from pollution reductions and improved farm finances. Some 30% of direct payments in the EU Common Agricultural Policy and an additional 30% of payments for regional development programs are environmental. There is some evidence that these schemes have contributed to 20% reductions in GHG emissions from the EU agricultural sector between 1990 and 2018. In the US, about 12% of net farm income comes from environmental payments by governments, but interventions have not generated the same kinds of farming system changes as the EU given that much of the support is for set-asides, and GHG emissions in the US have increased (IPCC, 2022).
But the main source of public financing for transition is not vast amounts of new money but rather re-orienting existing payments by making sustainability criteria a condition of public support. There is also some evidence that private financing follows the lead of public financing (Global Alliance for the Future of Food, 2022), so a re-orientation of public support will also bring more private dollars to sustainability initiatives.