Economic knowledge in the agriculture industry

I had the pleasure of attending the annual meetings of the Canadian Agricultural Economic Society, held recently in Vancouver. It was highly stimulating to hear researchers from across Canada present their economic research on a diverse set of issues.

The topics were far ranging, reaching all levels of the supply chain. Let’s start from the consumer perspective. Professor John Cranfield from the University of Guelph asked which food product attributes are consumers more willing to pay for among: 1) localness (measured by distance between production and purchase points); 2) organicness;  and 3) distribution channels (for example farmer-direct sales). He concluded that an organic certification resulted in a much higher premium than local. Moreover, marketing channels when advertised as a product attribute did not generate significant premiums for producers.

A study from Agriculture and Agri-Food Canada looked at the farm labour market. Agricultural producers now rely more on hired labour than ever. Farm work also requires considerable more skills. It is estimated than more than a third of hired farm workers are in skilled occupations (such as managers or specialized roles like livestock workers). Agriculture does a good job matching educational attainment and skills to actual jobs requirements. Yet there remain perceptions of skill shortages in the industry. In that sense, labour shortages may be more of a local phenomenon given the concentration of production.

A lot of the advanced economic research in Canada highlights the growing complexity in the agricultural world. One key takeaway from the meeting was that knowledge management is “the future”. There will always be risks involved in this industry, but it’s the interpretation of the data and actions based on that information that will define future success.

J.P. Gervais, Chief ag economist