A new three-part report, Growing Canada: How Agribusiness is Evolving, finds that agribusiness has the potential to help Canada’s economic recovery through the adoption of agricultural technologies (AgTech).
“There has never been a more opportune time to introduce digital innovations that can help to meet the emerging challenges of a rapidly changing farming sector,” says David Guthrie, partner and national agribusiness leader, KPMG in Canada, which put together the report. “AgTech innovations like drones and sensors are creating opportunities to transform the farming and agribusiness industries and alleviate the many pressures on our food system.”
For Canadian farmers, these challenges include food safety, population growth, food insecurity, sustainability expectations, labour shortages, stiff foreign competition, the lack of reliable rural broadband connectivity, and shifting weather patterns.
The KPMG report notes that the sector has great potential to be a driver of economic growth. According to the federal Minister of Finance’s Council on Economic Growth, Canada’s agriculture industry is predicted to generate an additional $11 billion of GDP by 2030, primarily due to population growth.
But, as the report finds, the adoption of AgTech innovations to automate and streamline many processes could make the industry significantly more productive and responsive to consumers’ rising expectations.
By leveraging data management technologies, sensors, predictive analytics, and artificial intelligence, farmers can harness information to improve irrigation and pest control, monitor for severe weather, and improve productivity, resiliency, and worker safety. AgTech innovations can also lead to more precise resource use, less waste, quicker go-to-market timelines, enhanced traceability and improved biosecurity, the report says.
AgTech also creates opportunities for farm workers to learn and use new skills such as data collection and analysis. These innovations are instrumental to the practice of so-called ‘controlled environment agriculture’ (CEA), or indoor farming, which is making farming more sustainable, adaptable and efficient.
“With all of the opportunities technology brings to fight against climate change, to improve nutritional security, and to enhance sustainability, there is no question that it’s the way of the future for farming,” says Mr. Guthrie.
Surge in AgTech start-ups
While Canadian famers have traditionally relied heavily on federal government programs and subsidies to fund new technology, another avenue has emerged to support them: private equity investors and venture capitalists.
Globally, venture funding for AgTech has exploded since 2015, says Mr. Guthrie. Venture capitalists have invested US$4 billion in AgTech start-ups since 2019, and AgTech is expected to be valued at US$729.5 billion by 2025, the report says.
At least 166 start-ups now focus on AgTech in Canada, helped in part by the federal government’s Canadian Agricultural Partnership program that engages private sector venture capitalists. Mr. Guthrie says this partnership program has helped to stimulate agricultural innovations, such as new crop varieties, livestock breeds, nutrient management practices, tilling methods and farm machinery, as well as advancements in biotechnology, precision agriculture, communications and information technologies.
The full three-part agribusiness report is available here.