Is there a reason why we don't have more value added processing in Canada, particularly Alberta?

Why are we mostly exporting raw resources?

Why aren't we further processing or exporting goods that are value added?

I think it is because of our thinking and attitude! As Canadians, we didn't invest as much as we could have or should have into post growth production! A lot of those investments were made outside the country from big multinational companies. We have to change that. Investing in our own country, further processing and creating value added goods creates prosperity, independence and food security.

Canadians are doing a better job at that. It is opening up. But, initially, a lot of outside money came in to do that. They saw the opportunity. It is like us selling timber to Japan 50 years ago and it comes back as processed wood, two by fours! That doesn't make sense to me. We should be selling them two by fours. Like I said, it is getting better. But, we still have a lot of catching up to do because a lot of jobs are lost when we sell raw products and it comes back as spaghetti.

Part of it is our culture, part of it is our government. Maybe there is not enough incentives. Maybe it's a lot of things; not just one thing. Could it be offshore processing policy uses cheap labor?

I think it's a lack of a business mindset too. There is a higher percentage of profit immediately in packaging. It doesn't even matter what kind of packaging it is.

Value-add can increase your profitability.

The food component of the final selling price is the smallest portion, packaging, labeling, all of that adds a lot more dollars to your revenue.

And yet, who takes the biggest risk in putting that product on the shelf? Mr. Producer does. So there is a lot of things that need to be corrected and I think we are on the way but I guess time will tell. It depends on what is going to happen with our governments and with COVID. One thing is for sure, when we have another Black Swan event we do not want high concentration of processing in one or two locations. This needs to be spread out so we can continue to process without major shut downs.

I believe COVID gave agriculture a great opportunity. It opened up the world's eyes as to how essential this industry really is. We had front row seats to the world. It pointed out how truly important it is to continue feeding the population regardless of what kind of event we have. AND food security and food safety is number one.

It's all about getting people to see the macro economy of their decisions as opposed to just the single action in front of them. We all need to see the big picture.

I look forward to next week when I'll be talking about Something Else!

Fred Mertz
Fred@thevoiceofagriculture.ca