Propelling agricultural productivity in Canada: Sustainable growth to feed the world

Canada has long been a standout among global food producers. Over the past half-century, Canadian agriculture has enjoyed significant productivity growth due to better farm management, input efficiency, and technological innovation.

But after peaking at two percent annually in the 1990s and early 2000s, productivity growth in Canadian agriculture has since decreased. Should the status quo continue, it will very likely continue to decline.

But the news isn’t all bad. There’s opportunity, as well as risk. In a new report, FCC’s Thought Leadership team predicts that revitalizing agricultural productivity growth in Canada could unlock $30 billion in income for farmers in the coming decade, generating up to $31 billion in GDP and supporting thousands of new jobs. Read the full report.

Figure 1: Average annual total factor productivity growth per decade in Canadian primary agriculture – 1961-2030 (forecasted)

Sources: USDA ERS - International Agricultural Productivity, FCC calculations

What is productivity?

We measure productivity, and its rate of growth, at the farm level and for the entire industry. It’s a measure of how efficiently inputs – such as labour, equipment, land, feed, and fertilizer – are transformed into outputs, such as livestock or crops. We aim to grow productivity because it allows us to increase output using fewer resources, at lower cost, and producing less waste.

Why is productivity important?

Productivity growth is critical if we’re to have a strong and sustainable agriculture sector. It supports job creation, wage gains, trade competitiveness, and food affordability. It supports farmers’ ability to adapt to changing production conditions, and stay profitable in the face of evolving risks and uncertainties – of which there’s no shortage in 2025.

How do we measure productivity?

Total factor productivity (TFP) is the measure we use. It’s a measure that evaluates all outputs – such as crop and animal products – against all inputs. Among other aspects TFP allows us to capture the impact of technological changes, and how they can cause inputs to work more efficiently together.

Productivity growth in Canadian agriculture is on the decline

And here’s what that measure has told us, in a nutshell: Canada’s high productivity growth in the 1990s and 2000s was driven in large part by the adoption of precision agricultural technologies, and the passing of the North American Free Trade Agreement (NAFTA) which increased trade flows, investments, and the spread of productivity-enhancing innovations. But over time, that trade-and-tech-driven productivity growth has stalled.

While there have been a number of contributing factors, our report identifies two key elements: underinvestment and slow adoption of new technologies. Canadian agriculture has lagged behind other sectors and countries in research and development spending, venture capital investments in commercialization, and the adoption of new technologies.

The $30-billion opportunity to revitalize Canadian agricultural productivity growth

Now for some good news: We can turn this around. In the long-run, productivity, profitability and sustainability are inextricably linked. And we see three pathways to returning to Canada’s previous peak rate of agricultural productivity growth (Figure 2).

Figure 2: Critical components of long-term agricultural productivity growth and key areas to implement change

Source: Authors

1. Efficiency – improve technical efficiency through better management.

2. Scaling production – capture scale economies through strategic investment.

3. Technical progress – foster Innovation.

An industry call to action

The bottom line? Canadian agriculture is at a crossroads. There’s an opportunity to launch a bold transformation towards sustainability, prosperity, and productivity, all driven by innovation. But that can only happen if the entire sector joins the effort. Blogs like this one, and our recent report, can help start the conversation. But the real power lies in the hands of farmers and industry leaders.

Our industry has a generational opportunity to demonstrate leadership on the global stage and show the world what Canadian agriculture can achieve. Will we seize that opportunity?

Article by: Bethany Lipka, Business Intelligence Analyst and Isaac Kwarteng, Senior Economist