Transcript APRN - University of Saskatchewan

Rural Implications of Innovations
in the Agri-food Sector
Presented at
Workshop of the Regional Group, Canada Agriculture Innovation Research
Network, APRN
and
Rural Secretariat
by
M. Rose Olfert
University of Saskatchewan
Ottawa, Ontario
January 25th
Overview
• Agriculture Innovations along the supply
chain—research and innovation at
different levels have different impacts on
rural
• Research and innovation policy with a
people-based (place-based?) vs. sectorbased focus
Agricultural Innovations
• Research-generated Innovations in the agrifood sector may be in:
– primary production
– first stage processing
– manufacturing production
– final demand (incl. services).
• Innovations in primary agriculture have strong
implications for rural areas since primary
production is located primarily in rural areas
Canada Farm Population (000’s), 1931 – 2001
3,500
3,000
Farm Population
2,500
2,000
1,500
1,000
500
0
1931
1941
1951
1961
1971
1981
1991
2001
Percent distribution of total population
Canada's census urban population
reached 80% of the total population in 2001
100%
Census urban
90%
Census rural
80%
Farm* population within census rural
70%
Non-farm population within census rural
60%
50%
40%
30%
20%
10%
Source: Statistics Canada. Census of Population, 1851 to 2006.
*The "farm population" refers to all members of a household with a census-farm operator present. The data for 2006 have not yet been published.
The census urban definition has changed over time but generally has referred to the population in settlements of 1,000 or more.
Courtesy of Ray Bollman, Statistics Canada
2001
1991
1981
1971
1961
1951
1941
1931
1921
1911
1901
1891
1881
1871
1861
1851
0%
The State of Rural Canada:
From Strength to Strength
Questions / Discussion
Implications
• Major innovations in primary have substituted
capital for labour
• Farm population declining precipitously
• Ag Sector policy requires a continuation of the
trend to maintain international
competitiveness
• Current high farm output prices will accelerate
consolidation
• Non-farm rural a constant proportion, about
20%--holding its own relative to urbanization
Growth in number of farms with $250,000 or more
gross farm revenue, Canada
1981
1986
1991
1996
2001
2006
70,000
60,000
Number of censusfarms
50,000
40,000
30,000
20,000
10,000
0
under
$2,500
$2,500$4,999
$5,000$9,999
Source: Statistics Canada. Census of Agriculture, 1981 to 2006 .
Courtesy of Ray Bollman, Statistics Canada
$10,000$24,999
$25,000$49,999
$50,000$99,999
$100,000$249,999
$250,000$499,999
$500,000- $1,000,000
$999,999
and over
Size class of gross farm revenue ($2005)
The Ag Processing Sector
• Manufacturing includes several stages
• Hog barns, poultry farms, feedlots in the primary
sector—enormous economies of size
• Slaughter plants, milling, oil crushing plants and
ethanol plants, canneries, wineries, etc., also
capital intensive, economies of size
– locally significant
• Also sausage makers, cheese making, ice cream
production, candies, bakeries, etc.—the more
labour intensive (consumer oriented), the more
likely to locate in or near urban?
Employment in Predominantly Rural Regions, 2001
No. Employed
(millions)
% of Total
Employment
4.517
100.0
Agriculture
.290
6.0
Processing, input supply, grain
storage
.070
1.5
Agriculture Plus
.360
7.5
Other Agri-food
.478
10.6
Agriculture and Agri-food
.838
18.6
All Industries
Predominantly rural = regions where more than 50% of pop live in a rural community (pop.
Density <150/km2
Agriculture = primary and services incidental to ag.
Other Agri-food = wholesale and retail of ag and food, plus empl. In the food and beverage
industries
Source: Rural and Small Town Bulletin Vol. 4, No. 8, plus Ray Bollman
Employment by Sector
Urban
Regions
Intermed.
Regions
Rural
Regions
All
Regions
Primary
Agriculture
13
16
71
100
All AgriFood
50
20
30
100
NON-AGR.
Sectors
53
20
28
100
Total, All
Sectors
51
20
29
100
Statistics Canada, Census of Population, assistance from Ray Bollman
Employment by Region
Urban
Regions
Intermed.
Regions
Rural
Regions
All
Regions
Primary
Agriculture
1
2
7
3
All AgriFood
11
12
12
12
NON-AGR.
Sectors
88
86
81
85
Total, All
Sectors
100
100
100
100
Statistics Canada, Census of Population, assistance from Ray Bollman
Innovations for the Rural Economy
• In the research and innovation agenda, what
would be of value to rural areas?
• “people” and “rural location” are important
• “innovation” needs to be broadly defined to
include institutional, infrastructure,
communication innovations
• Build on strengths
– Rural-urban linkages
– Selected manufacturing
– Natural amenities
Percent of Local Labour Force Commuting to
Winnipeg CMA—CCS Level Data
16
Source: C-RERL, University of Saskatchewan
Consider Four Types of Rural and the
Required Innovations
•
•
•
•
Rural Residence-Urban Employment
Manufacturing in Rural Space
High amenity rural areas
Primary production dependence
Rural residence-urban employment
• Quality of Life and natural amenities may be a
strength of rural areas
• Enhancing this ‘niche’ for rural areas requires
high quality services, state of the art
transportation, communication, facilitated
access to urban, governance arrangements
that reflect the inter-dependency
• Innovations required are institutional,
organizational and governance innovations
Manufacturing in Rural Space
• Low cost land (maybe labour) can be an
advantage
• Access to markets is still essential, access to
urban amenities and services
• Still need attractive local living conditions for the
labour force and population
• Innovations in land use institutions, governance,
linkages to markets, inputs, labour force.
• Research and innovation in the production that
occurs in rural space—goods and services
Amenity Areas
• Real potential as recreation areas—remember
the urban population is the market.
• Innovations in marketing, communication and
transportation will be necessary
• Innovations in defining recreation
opportunities and particularly the ‘bundling’
that can make them tourist destinations.
• Communication skills, world class hospitality,
success in a highly competitive industry
Primary Production Dependence
• Limited Input-oriented manufacturing
• Sparse populations require innovative ways of
providing health and education services—the
old models do not apply
• Efficient and reliable transportation will still be
essential—novel solutions for both bulk and
niche market (container) products.
• Communication innovations essential for
quality of life and for business reasons
Research and Innovation for Rural Communities
• Population retention/expansion is key
• Labour intensive, not capital intensive
economic activity is desirable
• Reduced transportation and communication
costs may reduce the “price” of distance
• Governance issues will be key—rural
jurisdictions cooperating to achieve threshold
size, and rural-urban cooperation to reflect
functional dependence and benefit from
urban-based agglomeration economies