Agriculture and Food

Since the Second World War, increases in income and the prevalence of dual-income families, together with the broad ethnic mix in the country’s population as well as desires for food variety and healthy foods, have contributed to increased demand for pre-prepared or convenience foods, ethnic foods and fresh fruits and vegetables. Much of Canada’s agricultural production and food processing is relatively efficient, with lower costs than in many nations. On average, Canadians spend less than 10 per cent of their total household expenditure on food purchased in grocery stores for home consumption — a result of the combined effects of comparatively high levels of average income and relatively inexpensive foods. In contrast, the percentage of household expenditures spent on food in other industrialized countries varies from approximately seven per cent to 14 per cent. When expenditures on food eaten away from home are added to home-consumed food expenditures, it is estimated that Canadians’s food expenditures account for about 14 per cent, on average, of total household spending.

Liberalization of international trade has also increased productivity in agriculture and has contributed to the international competitiveness of many sub-sectors in the industry. It has also led to considerable exports of Canadian oilseeds, grains, pork, beef and livestock. Consequently, there is a positive net balance of trade in agri-food products between Canada and the rest of the world. Canadian agri-food imports include fruit and vegetables, beverages and processed foods (see food and beverage industries).

Although Canadian primary agriculture has grown, it directly accounts for a much smaller share of national output and employment (less than two per cent each in 2011) than in earlier years. This shift is the result of growth in the Canadian economy and technical change in the industry, and is reflected in the longstanding, continuous trend toward larger, fewer and more specialized farms. This is due to lower costs of production per unit of farm output driven by the substitution of capital for labour through use of increasingly sophisticated machinery and other technology. As the average size and capital value of farms has increased, the number of people employed on farms — as well as the number of farms — has fallen.

The processing of farm and seafood products, food retailing, food service, transportation, handling and provision of input supplies to primary agriculture are major Canadian industries. In terms of sales, food and beverage processing is the country’s second largest manufacturing sector, accounting for 16 per cent of manufacturing employment in 2010. Its largest components, in terms of the value of sales, are meat processing, followed by dairy products, beverages, grain and oilseed milling, bakery products and fruit and vegetable processing.

Since the beginning of the 21st century, world prices for agricultural products have tended to increase. Explanations include relatively slow increases in productivity of major crops (attributed to insufficient agricultural research and poor policies for agriculture in some nations), increasing demand for improved diets in growing middle income countries (like China and India), increasing use of crops for biofuels and lower grain stock reserves. Higher agricultural prices have been accompanied by increased costs of many farm inputs.

In a world where about one in eight people go hungry every day, Canadians are fortunate to enjoy relatively abundant, cheap and safe food supplies. This has come about as a result of major economic and technical changes in both the Canadian economy and its food and agricultural sectors during the past century.

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